Washington, DC/ Bogota, May 25, 2006–
The International Finance Corporation, the private sector arm of the World Bank Group, will provide $50 million to Fundación Social in Colombia to help expand its operations providing access to credit for small companies.
This transaction will continue to strengthen the partnership between IFC and Fundación Social, entities that share a strategic interest in furthering Colombia’s economic development, in particular that of the lower-income population and small entrepreneurs. IFC’s operation will allow Fundación Social to grow its microfinance portfolio to more than US$37 million and reach over 53,000 clients over the next five years.
IFC’s financing, part of which has the option to convert into equity of different companies of Fundación Social, aims to leverage the foundation’s expansion strategy for its business organization. This operation follows IFC’s equity participation in BCSC, the largest company of the Fundación Social Group.
Roberto Albisetti, IFC’s Country Manager for Colombia, said, ”For IFC, the ongoing support to Fundación Social reflects our strategy in Colombia of facilitating access to finance for medium- and low-income segments of society. The development of the country’s small and medium enterprises is crucial for generating jobs, creating opportunities, and improving the people’s quality of life.”
“The strengthening of the relationship with IFC is a very important step for the Fundación. We have worked for over a century on a business model for overcoming the structural causes of poverty in Colombia. This mission relates to the objectives of IFC and its development strategy,” pointed out Alvaro Dávila Ladrón de Guevara, President of Fundación Social.
IFC in Colombia
IFC’s total portfolio in Colombia was $280 million as of June 2005. Since Colombia joined IFC in 1956, the Corporation has provided $1.4 billion, including syndications, for 58 companies.
The financial sector is one of IFC’s priorities in Colombia, with special emphasis on housing finance and microfinance, as well as strengthening local capital markets and improving corporate governance. IFC’s strategy includes also increasing support to strategic sectors for economic growth in the context of free trade agreements, such as infrastructure projects, port expansion, road and airport concessions, and support to companies in the logistic services sector.
About Fundación Social
IFC has found in the business area of Fundación Social a strong local ally in Colombia, given its track record and over 95 years’ experience in managing different types of businesses (including banks and insurance and real estate companies) and in developing successful strategies for the low- and middle-income population sectors, where it is a leading actor.
The Fundación Social Group comprises, among other companies, the BCSC bank, with its networks Banco Caja Social BCSC and Colmena BCSC; Riesgos Profesionales Colmena; Capitalizadora Colmena; Fiduciaria Colmena; and Deco Construcciones.
About IFC
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
