Panama City/Washington, D.C., April 17, 2007—
IFC, the private sector arm of the World Bank Group, has provided financing to Panama’s Grupo Mundial Tenedora S.A., through its banking subsidiary Banco Panameño de la Vivienda S.A. (Banvivienda), to strengthen the housing finance sector in Panama. The $25 million investment will help the bank expand mortgage banking availability, providing low-income people with access to long-term funding for housing.
Grupo Mundial is a Central American financial conglomerate and a new IFC client. IFC’s financing package consists of a long-term credit line to fund Banvivienda’s origination of mortgages that meet certain eligibility criteria in the low- and middle-income housing segments. This package will help the bank match its mortgage portfolio origination at a time when there is growing demand for mortgage products in Panama. It will also support the development of a standardized new asset class that can be further securitized.
Grupo Mundial's CEO, Rodrigo Diaz, noted, "IFC's financing will support Banvivienda's strategy to expand the availability of our housing finance products and services for the less privileged segments of society in Panama. Banvivienda looks forward to a long-term relationship with IFC in helping develop a strong housing finance sector in the country."
“The Banvivienda investment is a clear example of IFC’s added value in the financial sector. We are helping our client fill the market gap between the need to provide access to mortgage lending to poor people and the limited availability of longer-term funding,” said Jyrki Koskelo, IFC Director of Global Financial Markets. “IFC’s support for Grupo Mundial is consistent with our strategy in Central America, as it will support a regionally focused institution, which can provide economies of scale to benefit the smaller economies in the region,” he added.
Providing support that promotes primary mortgage lending and focusing on the low- and middle-income populations are key components of IFC’s financial markets strategy in Panama. Banks like Banvivienda, which focus on the poorest people, increase access to viable housing finance and enable more consumers to purchase homes.
IFC in Panama
The financial sector is a priority for IFC in Panama and throughout Central America. As of March 2007, IFC’s portfolio in Panama was over $58 million. IFC strategy is to support institutions that have a regional focus, so that the smaller countries in the area benefit from economies of scale, including in physical and financial infrastructure. The Banvivienda project achieves a key objective of IFC’s sustainability initiatives to develop and support the local capital markets and housing sector.
IFC’s current portfolio in Central America is $2,000 million invested in 116 projects, of which $1,373 million are for IFC's own account and $627 million in syndicated loans.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
.
About Banvivienda
Banvivienda was founded in 1981 by a group of investors led by Grupo Mundial, which currently has more than 99 percent shareholding. Since its founding, Banvivienda has been serving the market in Panama. It started as a mortgage bank, but it has recently expanded operations to provide other banking services, including consumer loans, credit cards, savings accounts, checking accounts, and overdrafts for retail clients and working capital loans, leasing, overdrafts and “creditos prendarios” for corporate consumers. The bank operates through a network of eight branches and three additional contact points. As of December 2006, Banvivienda had approved mortgage loans for over 5,000 Panamanian families, with an average loan amount of $30,000.
About Grupo Mundial
Grupo Mundial is a financial conglomerate, with insurance and banking operations throughout Central America, including Costa Rica, Guatemala, Honduras, Nicaragua and Panama. The holding company was established in 2005 and, in addition to Banvivienda, its main asset is Aseguradora Mundial, Panama’s leading insurer. Grupo Mundial has been listed in the Panamanian Stock Exchange since December 2005.
