Panama, August 11, 2021.- IFC, a member of the World Bank Group, ended the fiscal year 2021 with more than US$1.008 billion invested (including short term finance) to promote private sector development in Central America, mainly aimed at expanding access to credit for small and medium-sized enterprises (SMEs) and businesses owned by women, contributing to reducing the finance gap in the region.
Of the total invested in Central America, 19 percent corresponds to funds mobilized from other multilateral development banks and commercial banks, reinforcing IFC's role as a catalyst to further attract private capital to emerging countries and to open the way to new investors who can continue to promote sustainable development in the region.
"The pandemic has hit the Central American region very hard, in terms of health and economics. But in an unprecedented context, I applaud the ability of companies to transform and adapt to respond to the challenges of the countries in which they operate," said Sanaa Abouzaid, IFC Regional Manager in Central America. "IFC has been there to support the private sector in this process, responding with innovative solutions to accelerate economic recovery, while promoting greater inclusion," she added.
IFC deployed more than $139 million in financing to increase the ability of financial institutions to lend to SMEs whose liquidity has been affected, thus protecting jobs. Along these lines, Banco Agromercantil (BAM), BanPro, Banco Agrícola and Davivienda in Guatemala, Nicaragua, El Salvador, and Costa Rica benefited from this global response.
In addition to financing banking institutions, IFC made an equity investment in Carao Ventures, the first venture capital firm in Central America, to support the development of the early-stage startup ecosystem in the region. IFC also invested in the Central America Small Enterprises Investment Fund (CASEIF), to provide capital to about 12 businesses in the agribusiness, food and beverage, manufacturing, and telecommunications sectors. Likewise, a regional advisory program was initiated with the LAFISE Group to expand access to financial opportunities and services for SMEs and women entrepreneurs, aimed at ensuring their financial sustainability.
IFC's first investment focused on women's housing was made in Central America during this fiscal year, partnering with Global Bank in Panama to increase mortgage lending to low- and middle-income women. The region was also a showcase for the first Diversified Payment Rights (DPR) transaction with a gender focus, in conjunction with Fedecredito in El Salvador, to fund productive ventures led by women.
The Global Trade Finance Program (GTFP) allocated $347.88 million to support the export and import of critical agricultural and health products for the region, with 70 percent of this amount going to Northern Triangle countries (Guatemala, El Salvador, and Honduras). The segments that benefit most from this facility include the agricultural sector, which almost half of the transactions have been allocated to, as well as SMEs.
As one of the main engines of the economy in the region, IFC partnered with Comasa and Grupo Mercon, agricultural export companies, to provide financing and advisory solutions aimed at strengthening their competitiveness, implementing climate-smart agricultural practices, and helping local producers increase their production, reduce losses, be more efficient, and reduce greenhouse gas emissions.
IFC has been significantly strengthening its presence in Central America, reaching record numbers in recent years to expand access to credit, address critical infrastructure and public service needs, support agribusiness, and help the private sector mitigate the effects of the pandemic.
About IFC
The International Finance Corporation (IFC), a member organization of the World Bank Group, is the leading international development institution dedicated to the private sector in emerging markets. It works in more than 100 countries and uses its capital, expertise, and influence to create markets and opportunities in developing countries. In the fiscal year 2020, it invested US $22 billion in private companies and financial institutions in this group of countries, leveraging the capacity of the private sector to help end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
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