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IFC, Banco Daycoval Support Smaller Businesses, Including Those Owned by Women, in Brazil

Sao Paulo, Brazil, April 13, 2021—IFC, a member of the World Bank Group, is spearheading a $400 million financing package that will help smaller businesses, including those run by women, weather the economic fallout from the COVID-19 pandemic. The financing will be provided to Banco Daycoval, allowing the mid-sized bank to increase lending to small and medium enterprises (SMEs), especially those in more remote regions of Brazil where financing is often scarce.
 
The financing package consists of $130 million from IFC's own-account and a $270 million syndicated loan from a group of 10 banks: Itaú BBA, Banco Santander, Industrial and Commercial Bank of China Limited, Dubai (DIFC) Branch, Banco Latinoamericano de Comercio Exterior, Standard Chartered Bank, Banco de Occidente (Panama), Bradesco BAC Florida Bank, Bancaribe Curaçao Bank, Banco de Crédito e Inversiones, Miami Branch, and BHD International Bank (Panama).
 
"Daycoval is very pleased with this new investment by IFC and with the participation of important names in syndications," says Ricardo Gelbaum, Daycoval's Investor Relations Officer. "The transaction will allow us to further expand the reach and improve the efficiency of our work with SMEs, providing better coverage of underserved areas of the country and supporting women-owned businesses, which play such an important role in the Brazilian economy. We want to keep supporting our clients' business continuity during the economic crisis imposed by the pandemic."
 
With the loan, IFC aims to create and preserve jobs while supporting entrepreneurship in underserved regions and mobilizing private capital to minimize the impacts of the COVID-19 pandemic. By focusing on SMEs and female entrepreneurs, IFC hopes to reduce the gap in financing for these two segments and promote economic and social development in the most deprived areas.
 
"This credit operation is in line with IFC's strategic objective of increasing access to finance for underserved regions and is part of our systematic approach to support medium-sized financial institutions in Brazil," says Rogerio Santos, IFC's head of Financial Institutions for Brazil and the Southern Cone. "IFC's support for Daycoval will expand the loan options for SMEs at a delicate time, and thus contribute to greater resilience in this segment."
 
In the past 14 years, IFC and Daycoval have signed nine projects together, which include long-term financing, trade lines, and an equity investment. The most recent operation was in June 2020, with a $100 million loan to support the bank's working capital and commercial loans program to SMEs that were affected by the COVID-19 pandemic.
 
SMEs contribute close to 27 percent of Brazil's GDP and create about 54 percent of the total jobs in the country. But 13 percent of businesswomen shutter their operations due to a lack of financing. In comparable South American countries, this percentage is in the single digits.
 
"IFC's goal is to promote sustainable and inclusive economic growth, so we are very pleased with this operation aimed at strengthening the resilience of Brazilian SMEs, including companies led by women," says Carlos Leiria Pinto, IFC's Country Manager in Brazil.
 
This project is part of IFC's Banking on Women Program, which supports partners and financial institutions in offering sustainable solutions to women-owned businesses. The initiative has mobilized investments and provided advisory expertise to 104 financial institutions in 56 countries. As of December 2020, the program had a cumulative committed investment portfolio of $3 billion. As part of the program, Daycoval will have access to events, training and a network of professionals who will help the bank strengthen its products and services tailored to women.
 
About Banco Daycoval
Banco Daycoval is a financial institution over 50 years in the market specialized in lending to companies and to individuals in the retail segment (payroll and auto loans), foreign currency exchange operations (trade finance and remittance), asset and investment management. Headquartered in São Paulo, the Bank also has hundreds of service points located across 21 states plus the Federal District. Its recognition throughout the country comes from its conservative management profile and its seriousness and competence in business. Banco Daycoval ended the year with a Net Income of R$ 1.2 billion, with a Shareholders' Equity of R$ 4.4 billion and Return on Average Equity (ROAE) of 29.3%. The Expanded Loan Portfolio ended the year at R$ 36.6 billion, with Total Assets of R$ 49.2 billion. The bank has 2,553 employees distributed among the headquarters and 46 branches across the country.
 
About IFC
IFC—a 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 2020, we invested $22 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 www.ifc.org.
 
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