Washington, D.C./ Cali, Colombia, October 15, 2009
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IFC, a member of the World Bank Group, purchased bonds issued by Giros y Finanzas S.A in Colombia with a value of11,500 million Colombian pesos (US$6 million equivalent) to help the company expand affordable housing and working capital loans to low income borrowers. This is the first time that IFC purchases bonds issued by a company in Colombia. One big advantage when compared with a regular loan is that the bonds allow the company to give affordable interest rates to its clients.
Giros y Finanzas is a local remittance distributor that provides financing to the most underprivileged segment within Colombian society, reaching out more than 350,000 clients across the country. Through its services, it helps clients establish small businesses and improve their living standards. Many of GyF clients are women who depend on remittances from family members living abroad.
“With this new financing instrument, IFC will help Giros y Finanzas to continue reaching out to the most remote areas and a population who do not have access to other sources of financing. We have the capacity and the network to deliver financial services to this market segment. IFC is the right partner to achieve our objectives,” said Hector Fabio Rodriguez, CFO of Giros y Finanzas.
Roberto Albisetti, IFC country manager for the Andean Region, said, “This operation is consistent with IFC’s global remittances strategy that aims to support sound institutions to develop financial products linked to remittances and support access to housing, education, business funding, and insurance services. Our investment in GyF represents one of IFC’s first endeavors to help leverage remittances to increase access to finance for small businesses and home owners”.
The volume of remittances in Colombia has been increasing steadily. According to Colombia’s Central Bank, the country received more than US$4.84 billion in remittances during 2008, a one year growth of 7.8%.
IFC’s strategy in Colombia focuses on supporting sectors that are essential to social and economic development, including infrastructure, health, education, and public-private partnerships to build ports, roads, and airports. IFC assists leading Colombian companies modernize and expand their businesses internationally. IFC also promotes access to finance for micro, small and medium enterprises and works on improving the investment climate by simplifying regulations and royalty management. As of June 2009, IFC’s committed portfolio in the country was over $1 billion, its third largest in the Latin America and the Caribbean region.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $15 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
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About Giros y Finanzas
Giros y Finanzas (GyF) is a Colombian financial institution based in Cali, Colombia. Established in 1996, GyF is focused on the remittance business. The company offers its clients: distribution of national and international remittances as agents of Western Union; foreign exchange operations; deposits; maintaining a trading desk (investing excess cash to give liquidity to the institution); and lending. In the latter, the company grants car loans, leasing, factoring, and other type of consumer loans to money remittance beneficiaries.
