IFC, FMO to provide $30m for SMEs in Peru

Microfinance focus, Oct 25, 2010: IFC, a member of the World Bank Group, and FMO, the entrepreneurial development bank of Netherlands, together will provide $30 million to Banco Interamericano de Finanzas for development of long-term financial products for midsize businesses in Peru.

The IFC-FMO investment could help increase the number of small-business loans which BIF disburses by at least 3,500 a year from 2010 to 2014.  The investment consists of a $15 million senior loan for IFC’s account and a $15 million senior debt mobilized from FMO.  It is the first parallel loan given to a financial institution under an agreement signed by IFC and FMO in October 2009.  

IFC and BIF have been partners since 2007, when IFC provided BIF with a subordinated loan of $18 million. In 2009, IFC provided a $15 million trade-finance facility to increase the bank’s trade capacity with exporter and importer clients. With that investment, BIF became the first issuing bank under IFC’s Global Trade Finance Program in Peru.               

“This financing package will help diversify BIF’s funding sources and increase its duration, while creating a robust base to expand our support to Peruvian SMEs,” said Juan Ignacio de la Vega, BIF’s General Manager whereas  Jorrit Dingemans, FMO Investment Officer Financial Institutions, said, “Long-term financing for small and medium enterprises is still relatively scarce in Peru, and we are pleased to be able to support BIF in expanding access to such financing to more than 1,000 additional SME clients.”

IFC strategic priority in Peru and in Latin America is to help deepen the financial sector and improve an access to financing and banking services to segments that currently are not in reach of large banks, such as agribusiness, microfinance, and small and medium enterprises.

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