WASHINGTON, D.C., June, 25, 2004
—The International Finance Corporation, the private sector arm of the World Bank Group, today signed an agreement to provide a $50 million loan for its own account to Banco Agrícola S.A., the largest bank in El Salvador. The bank will use half of IFC’s investment to expand mortgage lending to low- and middle-income borrowers, and half for term loans to small and medium-size enterprises (SMEs)
The investment, signed in Washington by Peter Woicke, IFC’s Executive Vice President, and Rodolfo Schildknecht, Chairman of the Board of Banco Agricola, underlines IFC’s strategy in El Salvador. It assists the post-earthquake rebuilding of critical social infrastructure and helps deepen the financial sector, bolstering private sector wealth and job creation.
Mr. Woicke, also Managing Director of the World Bank, said, “IFC’s support for the housing finance and small and medium-size enterprise sectors will have a strong development impact, both by expanding term financing to important sectors of the economy and by helping develop domestic capital markets and the private sector.”
Mr. Schildknecht said, “Banco Agrícola is pleased to have developed a strong partnership with IFC and to be working together to support the development of El Salvador. This investment is a vote of confidence in our bank, and we look forward to broadening our relationship with IFC.”
Jyrki Koskelo, Director of IFC’s Global Financial Markets Department, added, “The development of a broad-based housing finance market is an important building block of the country's financial sector. A functioning mortgage system will help create a more liquid housing market and enable more first-time buyers to purchase property. At the same time, this transaction will expand lending to SMEs, with a positive impact on job creation.”
Banco Agrícola has assets of some $3 billion, about a third of the total assets in the country’s commercial banking system. Having pioneered retail banking in El Salvador, it offers a complete range of products and services to more than a million customers and has the largest branch network in the country. The Banco Agrícola Group also has four agencies in the United States, which mainly process remittances from Salvadorian expatriate workers, a subsidiary in Panama, representative offices in Honduras and Guatemala, and a controlling interest in Banco Caley Dagnall in Nicaragua.
The mission of IFC (
www.ifc.org
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
