Washington DC, Monday February 11, 2002
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement with the Latin American Agribusiness Development Corporation (LAAD) to provide a US$20 million credit line that will help fund small and medium export agribusiness firms in the region.
Created in 1970 with the objective of fighting depressed conditions in rural areas in Latin America, LAAD has disbursed more than $375 million to over 750 agribusiness projects in 16 countries. It is one of the very few financial institutions exclusively targeting the agricultural sector and has been doing so on a profitable basis for thirty years. LAAD is headquartered in Miami, with regional offices in Costa Rica, Guatemala, Honduras, Chile, Bolivia, Ecuador and the Dominican Republic.
IFC’s financing will enable LAAD to provide much-needed medium-term funds to private small and medium-sized enterprises (SME’s) primarily engaged in agriculture, livestock, fishing and forestry. Some loans will be as low as $250,000.
Bernard Pasquier, IFC’s Director for Latin America and the Caribbean, said: “IFC is proud to support a successful and efficient agribusiness lender to leverage our funds throughout the region, strengthen the export capacity of our member countries and promote sustainable practices in agribusiness production.”
Jean Paul Pinard, Director of IFC’s Agribusiness Department also noted: “This first experience in the field of small-scale agribusiness financing will give IFC an opportunity to possibly replicate the model or apply the lessons learned to future projects in other regions.”
This transaction fits in World Bank Group strategy to support agriculture and the rural sector in Latin America by recognizing its critical contribution to employment, the economy, and its impact on the environment.
LAAD’s President, Benjamin Fernandez acknowledged: “The projects financed with IFC’s credit line will generate foreign exchange and will create jobs in rural areas where unemployment has been traditionally high.”
The shareholders of LAAD include twelve multinational finance and agribusiness corporations, namely: Bank of America, Borden, Cargill, Dole, Rabobank, J.P. Morgan, Unilever Bestfoods, Deere, Novartis (previously Gerber), Monsanto, Agribands and Goodyear Tire. Good governance rules, transparent reporting and strict accounting standards constitute some of LAAD’s key factors of success.
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 through the close of the last fiscal year on June 30, 2001, IFC 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.
