Managua, Nicaragua, July 12, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide $5 million in loans to Financiera Nicaragüense de Desarrollo S.A, one of Central America's leading regulated microfinance institutions. IFC will also provide technical assistance.
IFC’s investment will support FINDESA’s transformation to a commercial bank, a more sustainable and effective model for microfinance institutions in Latin America, which will enable FINDESA to offer a broader range of financial services to more clients, in particular micro and smaller enterprises in need of loans. The financing is in two parts: a senior loan of $2 million and a subordinated convertible loan of $3 million.
"IFC is delighted to partner with FINDESA, which is serving an important market that is not well served by commerical banks. Through its support of microfinance institutions like FINDESA, IFC is working to broaden and deepen the reach of the financial sector in order to create more opportunities for investment, employment and growth," said Atul Mehta, IFC’s director for Latin America.
The IFC LAC Technical Assistance Facility will help FINDESA in a variety of areas including credit risk assessment and management—in particular for small and medium enterprises—and measuring performance by branch office, business line, and products. IFC’s assistance will also enable FINDESA to reinforce its strong corporate governance structures by training senior management and board members.
Gabriel Solorzano, FINDESA’s president, said, “As a bank, FINDESA hopes to continue its strong performance and expand services to micro, small, and medium enterprises. As client businesses grow and become more successful, FINDESA will grow to serve their changing needs.”
About FINDESA
FINDESA is a privately owned, deposit taking, non-bank financial institution regulated by the Nicaraguan Superintendence of Banks. It was licensed in April 2002 following its transformation from a non-governmental organization led by La Asociación del Fondo del Instituto Nicaragüense de Desarrollo (FINDE). Through the use of the individual lending methodology, FINDESA manages a micro loan portfolio of $56 million equivalent at December 31, 2005. The institution serves its clients through 19 branches, 17 of which are located throughout the more populous western and central areas of Nicaragua. FINDESA focuses its lending activities on rural micro enterprises, a niche in which it plans to further increase its presence by expanding to the Atlantic region of the country.
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.
