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Guatemala City, October 2020
—More than 1000 micro, small, and medium enterprises (MSMEs) in Guatemala will have improved access to finance, as a result of a partnership between IFC, a member of the World Bank Group, and Banco Agromercantil, BAM, that aims to address a $14.2-billion MSME finance gap in the country. With the unprecedented challenges of an ongoing pandemic, this partnership will allow smaller businesses to continue operations and preserve jobs, thereby contributing to the resilience of financial markets and accelerating the nation’s post pandemic recovery.
IFC is providing a $20 million loan to Banco Agromercantil, BAM, a member of Grupo Bancolombia, as part of the Working Capital Solutions Program from IFC’s global COVID-19 response. IFC will be mobilizing another $20 million from the Eco-Business Fund in Latin America, managed by Finance in Motion.
“IFC’s timely support will help us strengthen our position in the SME segment and allow us to expand financing to local companies, thus creating jobs. We are keen to work toward a defined strategy that will help preserve the market’s ability to foster economic recovery in Guatemala,” said Bolaños Coloma, Executive Director and CEO of Banco Agromercantil, BAM.
MSMEs are a key driver of the national economy, providing an equivalent to 3.1 percent of gross domestic product (GDP). Yet, about 41 percent of MSMEs are credit-constrained and 25 percent of them perceive financing to be a major or severe deterrent to growth, according to the country’s MSME Finance Forum. The situation may further deteriorate in the context of the COVID-19 crisis, with Guatemala’s GDP likely to contract by 3 percent in 2020.
“With the ongoing pandemic, it is essential to bolster Guatemala’s financial sector,” said Sanaa Abouzaid, IFC Country Manager for Central America. “IFC’s COVID-19 fast track facility will help keep smaller businesses solvent. This will save jobs, companies, and support Guatemala's sustainable and resilient recovery process,” Abouzaid added.
BAM has been a client of IFC since 2019. The loan to BAM is aligned with IFC's strategy in Guatemala, which focuses on supporting economic growth and securing opportunities for the most underserved segments of society.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org
.
About BAM
Banco Agromercantil de Guatemala, BAM, arises from the merger of two banking institutions of solid prestige and a long tradition, Banco Agrícola Mercantil and Banco del Agro. As part of Bancolombia Group, BAM's purpose is to promote sustainable economic development to achieve the well-being of all. It has over 165 agencies distributed in the 22 departments of Guatemala, and digital banking called BAMNET, also available in mobile version through the BAM APP app and by phone at (502)2338-6565. For more information, see
www.bam.com.gt
and @BAMGuatemala on Twitter, Facebook, and Instagram.
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