Guatemala City, July 16, 2019
— IFC, a member of the World Bank Group, approved a US$225 million loan to Banco Agromercantil, BAM, a subsidiary in Guatemala of Grupo Bancolombia, with the goal of boosting BAM's ability to increase its lending for housing as well as small and medium-sized businesses (SMEs).
The loan, which consists of US$125 million from IFC and US $ 100 million mobilized by IFC from other investors, will allow BAM to expand its mortgage loans and financing capacity to SMEs.
An increase in mortgage loans in Guatemala can play an important role in boosting the development of the housing sector in the country and closing the housing gap. The country has an estimated housing deficit of 2.2 million units. This is, in part, the result of the shortage of mortgage loans, which represent less than 1.8 percent of Guatemala's gross domestic product (GDP).
The housing gap in Guatemala means that the population cannot access adequate housing, which is a basic need. A dynamic housing sector is also vital for economic growth and the ability to generate jobs. The World Bank's global estimates indicate that each new built house can create five new jobs in sectors such as construction, finance, manufacturing and retail.
The financing will also help BAM increase its loans to SMEs, which face a financing deficit that represents around 20% of Guatemala's GDP and is an obstacle to job creation and economic growth.
The transformation of banking sector in Guatemala in favor of the development of the country is led by financial entities that, with their trajectory, innovation, and solidity, are driving the economic growth of the region.
Such is the case of BAM, which with impact investments and the accompaniment of its clients' projects has enhanced the development opportunities for Guatemalans in a wide variety of categories.
"For 93 years, we have supported the projects and needs of Guatemalans, offering innovative financial solutions for individuals and companies, thus contributing to achieving their dreams. We recognize the importance of SMEs in our portfolio and their ability to contribute to economic growth and job creation in the country," said Federico Bolaños Coloma, BAM's General Manager.
The loan is also another example of the important relationship between IFC and Grupo Bancolombia, based in Medellín, which in the past has included the issuance of green bonds to finance green building projects.
"Having a dynamic housing sector with access to finance for SMEs is fundamental for Guatemala's sustainable development and we are confident that financial institutions like BAM will play an important role in driving the growth of these sectors," said Marcelo Castellanos, IFC Regional Industry Manager. "BAM and Bancolombia are ideal partners in our efforts to promote access to financing in the banking sector in Guatemala and the region," he added.
The loan to BAM is consistent with IFC's strategy in Guatemala, which focuses on supporting economic growth and securing opportunities for the most underserved segments of society.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, please visit
www.ifc.org
About BAM
Banco Agromercantil de Guatemala, BAM, arises from the merger of two banking institutions of solid prestige and a long tradition, Banco Agrícola Mercantil and Banco del Agro. As of 2015, Grupo Bancolombia became the majority shareholder of BAM, with a 60% stake. The strategic pillars of BAM are: Innovation, Superior customer experience, Profitable growth and sustainability, Operational and technological excellence and Humanistic culture and high performance. BAM has more than 165 agencies distributed in the 22 departments of Guatemala, and digital banking called BAMNET, also available in a mobile version through the BAM App and by telephone through the Contact Center. For more information, see
www.bam.com.gt
and @BAMGuatemala on Twitter, Facebook and Instagram.
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