Washington DC, October 4, 2001
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, today signed an agreement for a US$5 million credit line with Banco de la Exportación (Banexpo) of Nicaragua, one of the country’s leading financial institutions, for on-lending to local small and medium-sized enterprises (SMEs).
The line will provide scarce long-term funds to SMEs during a difficult economic period for Nicaragua, which has been affected by a decline in coffee prices as well as a drought in the northern part of the country. These factors, along with the consolidation in the commercial banking sector, have made it difficult for private sector companies to obtain cost-effective funding, which will be crucial for the continued expansion and modernization of the private sector.
Banexpo is Nicaragua’s fourth-largest private commercial bank, with assets of $223 million, deposits of $184 million and equity of $16 million as of June 30, 2001.
Bernard Pasquier, IFC Director of the Latin America and Caribbean Department said that “this investment will help provide much needed funding for small and medium enterprises in Nicaragua, supporting the efforts of local entrepreneurs to strengthen their businesses and create jobs.” Mr. Pasquier added that “in addition to providing long term funding, IFC will also help transfer international best practices, particularly in environmental risk management, to the Nicaraguan market.”
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
