Mexico City, Mexico / Washington D.C., December 13, 2006—
The International Finance Corporation, the private sector arm of the World Bank Group, has partnered with Financiera Educativa de Mexico (Finem) to establish one of the first private financing facilities for student loans in Mexico. The project will increase access to higher education by enabling lower and middle-income students to finance their post-secondary education with long-term loans.
IFC’s investment consists of a 10-year senior loan facility of up to $15 million equivalent in Mexican Pesos.
The project will build upon the work done by SOFES (Sociedad de Fomento a la Educacion Superior), a Mexican government-sponsored student loan program created in 1998 with the support of the World Bank.
Finem is a specialized nonbank financial institution that was established in December 2004 to provide financing to Mexico’s education sector. The company’s goal is to develop a substantial portfolio of student loans and loans to privately-owned Mexican educational institutions to help fund their expansion and infrastructure programs.
A recent World Bank paper that evaluated the impact of student loan financing in Mexico concluded that students who receive financial support have a 24 percent higher chance of university enrollment and that the programs themselves led to greater social mobility and equality.
Atul Mehta, IFC’s Director for Latin America and the Caribbean, said, “The project will have an important demonstration effect for investors and financial institutions, showing that education financing can be a viable and sustainable business.”
Guy Ellena, IFC’s Director for Health and Education, noted, “A well developed student loan market will not only enhance access to higher education and university enrollment but also distribute the economic benefits of higher education more evenly.”
Francisco Gonzalez-Cos, General Director of Finem, added, “Finem values IFC’s participation in this project as a long-term partner in our efforts to meet the vast needs of students and educational institutions in Mexico.”
IFC in Mexico
Since 1956, IFC has invested $5.6 billion in private sector companies in Mexico, including $2.2 billion in syndications, in sectors ranging from infrastructure and manufacturing to agribusiness and the financial sector, making this country the second
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largest recipient of IFC financing in dollar value after Brazil. IFC committed $260.53 million in FY06 as new financing in Mexico and held a total portfolio of $1.5 billion (including $1.1 billion for IFC’s account and $436 million for syndications) as of June 2006
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IFC’s strategy for Mexico focuses on enhancing the competitiveness of the private sector; further deepening the financial sector with the introduction of specialized products and markets; promoting investments in areas newly opened to private sector participation; and promoting sustainable environmental and social development and good corporate governance.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
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