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IFC Helps Banco Agricola Increase Access to Finance, Respond to COVID-19 Pandemic in El Salvador

San Salvador, September 1, 2020- IFC, a member of the World Bank Group, is working with Banco Agricola, to support micro, small and medium enterprises (MSMEs), women-owned SMEs (WSMEs), housing for underserved segments, and climate-smart investments, including green buildings, in El Salvador, with a $330 million financing package.

MSMEs represent nearly all of El Salvador’s enterprises, but just over 40 percent of firms have a bank loan or line of credit.  The barriers are even higher for women, with only 24 percent of women-owned businesses with access to a bank account. Despite the country’s high rate of urbanization, low- and middle-income Salvadorans struggle to obtain affordable mortgage options from commercial institutions.

IFC is providing up to $330 million in financing that will back Banco Agricola’s objective of better reaching these underserved segments, promoting financial inclusion and increasing formality.  In addition, the leading Salvadoran bank will play an important role in climate change mitigation by funding climate-smart assets projects in El Salvador.

The financing package consists of loan up to $180 million from IFC on its own account, $50 million from by IFC’s Managed Co-Lending Portfolio Program (MCPP), and up to $100 million mobilized by IFC from international impact investors. Of the total package, $30 million will be channeled to provide short-term working capital needs of Salvadorian MSMEs, helping them to cope with the impact of the COVID-19 pandemic. IFC’s financing package also includes a performance-based incentive from the Women Entrepreneurs Finance Initiative (We-Fi) of up to $583,000 for lending to woman-owned SMEs.

“SMEs and women entrepreneurs are facing greater difficulties to get the funding required to run their day-to-day business. IFC aims to help them address this immediate need, while promoting better access to credit in the long-term,” said Sanaa Abouzaid, IFC’s Regional Manager for Central America.

This support to the financial sector will also help preserve the market’s ability to foster economic recovery as conditions normalize, while also demonstrating the viability of financing MSME, WSME, climate-smart assets and housing for low- and middle-income segments.

Banco Agricola’s CEO, Rafael Barraza, noted: "More than 30% of our country's workforce is generated by micro and small businesses, and it is important to support them with tools that protect them in the midst of this crisis, ensuring their resilience in the market and the preservation and generation of jobs in the country. As the bank of Salvadorans, we recognize our commitment and responsibility, and for that reason, we want to contribute to the efforts, already being made by different sectors, with these types of financial injections, because El Salvador needs us all."

The engagement includes an advisory component, supported by We-Fi, to help identify business opportunities that address specific banking needs for WSMEs in El Salvador and scale up their access to financial products and services.

Furthermore, IFC will provide Banco Agricola with support to establish a new climate finance business line and thereby become one of the first banks in El Salvador to grow its portfolio of climate-smart assets, including sustainable construction activities for green buildings and housing. IFC will share its knowledge on green buildings and equip the Bank with its Excellence in Design for Greater Efficiencies (EDGE) green building certification tool.

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 in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit .

About Banco Agricola:
Banco Agricola, as the bank of Salvadorans for 65 years, promotes sustainable economic development to achieve the well-being of all. With more than one million customers, its mission is to generate peace of mind and satisfaction for people and society, providing solutions that promote financial inclusion, strengthen the competitiveness of the productive fabric, and support the construction of more sustainable cities and communities.

About We-Fi
The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership among the 14 governments that have made financial contributions, six multilateral development banks that serve as implementing partners, and other public and private stakeholders. We-Fi was formally established in October 2017 as a Financial Intermediary Fund hosted by the World Bank. We-Fi invests in programs and projects that help unlock billions of dollars in financing to address the full range of barriers facing women entrepreneurs—increasing access to finance, markets, technology, and mentoring, while strengthening policy, legal and regulatory frameworks. As one of the We-Fi Implementing Partners, IFC supports private sector clients with investment and advisory services to expand financial services and market access for women-owned/led firms, as well as increasing the capacity of women entrepreneurs to run high-growth businesses. For more information, visit .

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