Washington, D.C., December 28, 2001—
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide a US$5 million loan to Banco de la Microempresa S.A. (MIBANCO), Peru’s leading microfinance institution, to support its portfolio and expansion plans.
MIBANCO was created in 1998 by Accion Comunitaria del Peru (ACP), a microfinance institution and non-governmental organization that operated in the country for 25 years, before becoming a regulated commercial bank. ACP worked in poor neighborhoods in Lima, despite the prevailing environment of hyperinflation, and by mid-1998 its portfolio had grown to $10 million, with a total of 30,000 clients.
Its new status as a commercial bank allowed MIBANCO to expand rapidly. In March 2001, three years after its founding, the bank had doubled its client base to 63,000, and had grown its total loan portfolio fourfold to approximately $40 million. MIBANCO is the third largest microfinance institution in Latin America and is one of the few rated by local rating agencies.
Microfinance involves the provision of a broad range of financial services to low-income households and microenterprises. Services may include deposits, loans, payment services and money transfers.
MIBANCO is headquartered in Lima, Peru, and has a total of 26 branches throughout the Lima region, and has recently begun to expand into other areas of the country. In the short-term, IFC’s financing will allow MIBANCO to continue its portfolio, growth and expansion. However, the medium-term goal is to provide MIBANCO with financial support as the bank further expands funding sources to the public market, through deposit taking, and to the private money markets.
Marcos Brujis, IFC’s Manager of Financial Markets for Latin America and the Caribbean, noted that “IFC’s investment will not only lend comfort to market investors, but also will begin a relationship which MIBANCO may find useful as it attempts to go to the market, with bond issuances, for the first time.” Mr. Brujis added: “This loan fits the World Bank Group strategy to support the Peruvian government’s efforts in improving the access of small entrepreneurs to basic financial services.”
In Peru, small and microenterprises are vital to the economy: together they account for 98 percent of all firms, and generate 75 percent of national employment and 45 percent of the country’s total GDP. Estimates indicate that less than 15 percent of these enterprises have access to the formal financial sector.
Although direct support for microcredit institutions represent a relatively new business line, IFC has a growing pipeline of microlending projects worldwide, in countries such as Bolivia, Bosnia, Bulgaria, Cambodia, Georgia, Haiti, India and the Philippines. This year, IFC supported a key microfinance project in Mexico,
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, and established a strategic partnership with ACCION Internacional to finance four microlending institutions in Mozambique, Brazil, Guatemala and South Africa.
The controlling shareholder of MIBANCO is Accion Comunitaria del Peru. Other equity investors include Corporacion Andina de Fomento (CAF), Profund International, a for-profit private equity investment fund that promotes growth of regulated financial intermediaries in Latin America, and ACCION Internacional, an umbrella organization for affiliated microfinance institutions throughout the Americas.
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.
