Lima, Peru, November 27, 2012—
IFC Capitalization Fund, a fund managed by IFC Asset Management Company, signed today an investment in Dominican Republic-based Banco BHD, helping the bank expand operations and support lending to small- and medium-size enterprises (SMEs).
The $25 million subordinated loan will provide BHD with Tier II capital under local regulatory requirements. BHD expects to be able to leverage the loan resulting in at least $100 million in new loans to help Dominican-based businesses grow and create new jobs, particularly in the SME segment, which constitutes approximately 30 percent of GDP and 90 percent of all the companies in the Dominican Republic.
“In 2003, Banco BHD was the first institution to issue Tier 2 capital in the Dominican Republic and the first banking institution to receive financing from IFC,” said Luis Molina Achecar, Chairman of BHD Bank. “BHD is now the first institution in the Caribbean to receive an investment from the IFC Capitalization Fund. We are grateful for IFC’s recognition of the strength of our business model as well as the opportunity to expand lending to businesses in the Dominican Republic.”
IFC Capitalization Fund is a global equity and subordinated debt fund founded by the IFC and the Japan Bank for International Cooperation. It invests in banks considered vital to the financial system of emerging-market countries. IFC’s relationship with Banco BHD began in 2003. Since then, IFC has engaged with Banco BHD in three investments and one advisory project, including an equity participation in its holding company, Centro Financiero BHD.
“Banco BHD is one of IFC’s most important clients in the Caribbean,” according to Jean Philip Prosper, IFC’s Director for Latin America and the Caribbean. “By supporting it with subordinated debt, IFC will boost the bank’s capital, allowing it to grow into additional market segments, most specifically the under-banked micro, small, and medium-enterprise sector, which will benefit those persons at the bottom of the pyramid and improve access to finance in the country.”
The investment is aligned with the World Bank and IFC’s Country Partnership Strategy in the Dominican Republic, which aims to strengthen linkages with existing clients by supporting their sustainability and enhancing their access to finance. It is also aligned with IFC’s Caribbean strategy to promote economic development through crisis response and financial inclusion.
“The investment provides a unique opportunity to partner with BHD, a leading Dominican Republic bank, via the use of an innovative product that will help position the bank for future growth,” said Marcos Brujis, Head of the IFC Capitalization Fund.
Over the last three years, IFC invested $638 million in the Caribbean. In 2011 alone, IFC created over 28,000 jobs in the region and reached more than 130,000 patients, 2,300 students, and 4 million customers through power generation.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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About IFC Asset Management Company
IFC Asset Management Company LLC, a wholly-owned subsidiary of IFC, invests third-party capital, enabling outside investors to benefit from IFC’s expertise in achieving strong equity returns, as well as positive development impact in the countries in which it invests. It manages the $3 billion IFC Capitalization Fund, founded by IFC and the Japan Bank for International Cooperation; the $1 billion IFC African, Latin American, and Caribbean Fund; and the $182 million Africa Capitalization Fund.
About BHD
Banco BHD is the second largest private commercial bank in the Dominican Republic. The Bank is a subsidiary of Centro Financiero BHD, a diversified financial services company whose activities include commercial banking, consumer and micro finance, pension funds, insurance, remittances and private banking.
About JBIC
Japan Bank for International Cooperation (JBIC) is a policy-based financial institution wholly owned by the Japanese government. JBIC contributes to the development of Japan and the international economy by promoting overseas development and securing resources which are important to maintaining and improving the international competitiveness of Japanese industries and overseas businesses. It strives to preserve the global environment, while supplementing financial transactions implemented by financial institutions. JBIC also provides the financial services necessary to prevent disruptions to international financial order, and takes appropriate measures with respect to damages caused by such disruptions. For more information, visit
www.jbic.go.jp/en
.
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