Washington DC, March 14, 2018
— IFC, a member of the World Bank Group, is structuring a transaction to provide up to $115 million in financing to Nicaragua’s Banco LAFISE BANCENTRO, S.A. to boost access to credit for small and medium entrepreneurs and increase access to housing loans for families.
In addition, IFC’s financing is linked to the development of LAFISE BANCENTRO’S climate smart portfolio for companies that want to adopt more energy efficient practices and utilize cleaner energy sources. The financing will allow more companies to access credit to invest in resource efficient and clean energy projects.
“With IFC’s support, we are helping more Nicaraguans follow their dreams – whether that means growing a business or becoming a homeowner for the first time,” said Mr. Roberto J. Zamora Llanes, LAFISE BANCENTRO’S Chairman. “IFC’s support also allows us to make funds available that are targeted to energy efficiency.”
Over the past five years, Nicaragua’s economic growth has averaged about 4.8 percent, becoming the country with the second highest growth in Central America. Despite this, poverty and inequality remain high.
IFC’s loan to LAFISE BANCENTRO aims to improve access to financing and access to housing – two important needs in the country.
Small and medium enterprises in Nicaragua are an important engine for job creation, however they face a substantial credit gap of $2.4 billion. Only 15 percent of them have access to formal financing, which limits their ability to grow.
“Financial inclusion plays a vital role in economic development,” said Marcelo Castellanos, Regional Industry Manager for Financial Institutions in Latina America. “It can improve people’s lives in measurable ways by generating income and economic activity. Through this project with LAFISE BANCENTRO, IFC hopes to foster innovation and strengthen the financial sector in Nicaragua.”
Nicaragua’s government estimates that the country needs nearly one million more homes to fill its housing deficit. IFC’s loan will help LAFISE BANCENTRO grow its housing portfolio to provide additional mortgage loans.
LAFISE BANCENTRO will also use the funding to provide loans to finance climate smart projects. By introducing green finance standards into LAFISE BANCENTRO’s lending practices, IFC hopes to encourage other Nicaraguan financial institutions which are unfamiliar with this market to follow suit.
The loan to LAFISE BANCENTRO will be committed in two different tranches: the first tranche, in March 2018, consists of a senior debt of $42.5 million and a subordinated debt of $32.5 million that will strengthen LAFISE’s capital. From the total amount, $50 million will be from IFC’s own account and the remaining $25 million will be provided by OFID (the OPEC Fund for International Development). The second tranche is expected to be committed in April 2018 and includes a senior debt of $20 million and a subordinated debt of $20 million provided by other parallel lenders. Senior loans will be granted with a tenor of 7 years and subordinated loans with a tenor of 10 years.
OFID has supported sustainable development projects in Nicaragua since 2000. The institution’s public sector, private sector and trade finance mechanisms have together allocated more than $230 million to projects in the country’s transport, energy, agriculture and water and sanitation sectors.
Banco LAFISE BANCENTRO, S.A. is the largest banking subsidiary of LAFISE GROUP, a financial group established in 1985, with presence in eleven countries and more than $4 billion in assets. IFC’s relationship with LAFISE GROUP started in 2008. Since then, IFC has provided trade lines for Banco LAFISE COSTA RICA, Banco LAFISE PAMAMA and Banco LAFISE HONDURAS.
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. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org
About OFID
OFID (the OPEC Fund for International Development) is the development finance institution established by the Member States of OPEC in 1976 as a channel of aid to developing countries. OFID works in cooperation with developing country partners and the international donor community to stimulate economic growth and alleviate poverty in all disadvantaged regions of the world. It does this by providing financing to build essential infrastructure, strengthen social services delivery and promote productivity, competitiveness and trade. OFID’s work is people-centered, focusing on projects that meet basic needs – such as food, energy, clean water and sanitation, healthcare and education – with the aim of encouraging self-reliance and inspiring hope for the future. See
www.ofid.org
for more.
About Banco LAFISE BANCENTRO, S.A.
LAFISE BANCENTRO was founded in 1991 and it is the second largest Bank in Nicaragua in terms of assets with 24% of the market share. The Bank has a strong participation in the commercial and industrial sectors; moreover consolidates the operation of two subsidiaries, SEGUROS LAFISE, S.A. and ALMACENADORA LAFISE, S.A. LAFISE BANCENTRO and its subsidiaries have over 2,800 employees and they are managed by a professional management team with a broad knowledge of economic activities in Central America. For more information, visit:
https://www.lafise.com/
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