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Washington, D.C., April 2, 2007
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide a five-year local currency financing to Brazil’s Bicbanco to support its lending to small and medium enterprises. The bank will use the approximately 82 million reais (equivalent to $40 million) proceeds from the transaction to provide short and medium-term competitive financing to its clients.
The transaction involves local currency denominated financing provided through a cross-border, real-linked structure.
Atul Mehta, IFC Director for Latin America and the Caribbean, said, “This transaction fits our strategy not only to support the operations of midsize Brazilian banks through diversification of funding, but also to expand SMEs’ access to competitive financing. This has been achieved, more often than not, with local currency structures like this one.”
Bicbanco is one of Brazil's leading midsize banks, with a long track record in financing small and medium enterprises. Midsize financial institutions such as Bicbanco play an important role in promoting competition and improving efficiency in the country's banking sector, by ensuring that SMEs have access to the financing they need to increase their business.
Jyrki Koskelo, IFC Director for Global Financial Markets, added, "Bicbanco is one of the most active banks under IFC's Global Trade Finance Program in Latin America. This transaction complements these efforts and reflects the growing relationship between Bicbanco and IFC."
The Global Trade Finance Program, launched by IFC in 2005, supports trade with the emerging markets worldwide. It aims to increase the developing countries’ share of global trade and to promote South-South flows of goods and services. Bicbanco was the first Brazilian bank to join the program last year, with a $50 million approved exposure. Bicbanco is a leading provider of pre-export and import finance products to the SME segment in Brazil.
Milto Bardini, Bicbanco’s Executive Vice President and President of ABBC (Brazilian Commercial Banks’ Association), said, “The unique combination of the local currency indexation, floating rate, and long-term features in funding from IFC provides an important tool for midsize banks to compete in the SME segment. This adds to IFC’s well-known tradition of supporting the Brazilian banking system.”
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
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About BICBANCO
Bicbanco is one of the oldest private banks in Brazil and the county’s seventh-largest national private bank serving midsize companies. The bank’s main lines of products are working capital and secured loans, trade finance, and public employee loans. For more information, please visit
www.bicbanco.com.br
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