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Quito, Ecuador, September 5th 2023. The International Finance Corporation (IFC), member of the World Bank, announced a US$70 million investment in Banco Diners Club del Ecuador to support higher education students in need of financial support. This is the first investment by IFC in Latin America under the structure of a Merchant Voucher Receivables (MVR) program. The cash flow backed by vouchers is generated from the use of credit cards issued by financial institutions outside Ecuador at merchants within the Bank's acquiring network in the country. According to data from the Superintendence of Banks of Ecuador, Ecuador's education loan market is underdeveloped, accounting for less than 1% of the banking system's total gross portfolio. In addition, there is lack of alternative financing options for students to meet their short-term funding needs; for example, to pay for the tuition of the whole semester upfront, as typically required by universities. As a result, students struggle to access university and to remain enrolled. IFC´s financing to Banco Diners Club del Ecuador helps address this constraint by providing loans that give students and their families the flexibility to defer tuition payments and related educational expenses, helping them to weather shocks in their personal finances so that students can remain in university. Manuel Reyes-Retana, IFC's Regional Director for South America, said: "Reducing inequality by increasing access to education is a central factor to increase inclusion in Ecuador and Latin America. This groundbreaking alliance with Banco Diners Club del Ecuador reinforces IFC's strategic approach to education, which is focused on investing in quality education and training to strengthen human capital and enable people to prosper and be productive in rapidly changing economies." Jaime Crow, Vice President of Finance of Diners Club del Ecuador, said: "Education has always been a priority for us, so receiving this important investment is a great opportunity to reinforce our objective of supporting university students from all over the country. " Demand for education is soaring. The number of higher education students is projected to more than double by 2025. Most of this growth will come from the emerging markets. Meanwhile, youth unemployment continues to grow globally, even as employers report difficulty in finding workers with the right skills. About IFCIFC — 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 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org. Stay connectedwww.ifc.org/lacwww.twitter.com/IFC_LACwww.linkedin.com/company/ifc-américa-latina-y-el-caribewww.facebook.com/IFCwbgwww.instagram.com/ifc_org/www.youtube.com/IFCvideocastswww.twitter.com/IFC_orgwww.ifc.org/SocialMediaIndex
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