Washington, DC, March 16—The International
Finance Corporation, the private sector arm of the World Bank Group, is
breaking new ground with a five-year Colombian Peso loan of COP$20.7 billion
($9 million equivalent) to Fundacion WWB Colombia, one of Latin America’s
leading microfinance institutions serving more than 110,000 microentrepreneurs.
The transaction is IFC’s first financing to a microfinance entity in Colombia.
It consists of a local currency debt financing that will help Fundacion
WWB Colombia provide an additional 25,000 loans to low-income clients during
the next five years.
Jyrki Koskelo, IFC’s Global Financial Markets director, said, ”Fundacion
WWB Colombia combines extraordinary outreach to poor microentrepreneurs
with exceptional financial results, making it an ideal candidate for IFC
financing and long-term partnership.”
Clara de Akerman, founder and president of FWWB Colombia, underlined the
importance of the transaction. “Our clients have revenues and expenses
in Colombian Pesos, and therefore need loans in the same currency,” de
Akerman said. “IFC’s financing allows us to serve our clients, expand
our portfolio and, by virtue of carrying a fixed interest rate, improve
To provide the local currency financing, IFC—backed by its AAA rating—will
enter into currency swap transactions with financial institutions present
in the Colombian market.
After several years of strong growth, FWWB Colombia serves more than 120,000
microentrepreneurs—many of whom live at or below the country’s poverty
line—with working capital loans and other essential financial services.
Loans average Colombian Peso $1.77 million of COP ($779 equivalent) and
typically represent the client’s first relationship with a financial service
provider. As of January 31, 2006, FWWB Colombia’s loan portfolio
was Colombian Peso $233.1 billion of COP ($103 million equivalent), with
131,827 loans outstanding. Two thirds of FWWB Colombia’s clients
are women, an important factor underpinning the organization’s success,
as women tend to have a better repayment records than men.
FWWB Colombia, based in Cali, is a non-profit foundation affiliated with
the Women’s World Banking Network, a global group of 24 microfinance institutions
in 19 countries.
IFC in Colombia
IFC’s total portfolio in Colombia was
$280 million as of June 2005.Since Colombia joined IFC in 1956, the Corporation
has provided $1.4 billion, including syndications, for 58 companies.
The financial sector continues to be one of IFC’s priorities in Colombia,
with special emphasis on housing finance and microfinance, as well as strengthening
local capital markets and improving corporate governance. IFC’s strategy
in the country also involves increasing support to strategic sectors
for economic growth in the context of free trade agreements. This strategy
includes financing infrastructure projects such as port expansion, road
and airport concessions, and support to companies in the logistic services
sector. In addition, IFC seeks to finance oil and gas companies expanding
in the region
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the institutions
of the World Bank Group but is legally and financially independent. Its
178 member countries provide its share capital and collectively determine
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments, helps clients
improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its funds
and arranged $24 billion in syndications for 3,319 companies in 140 developing
countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion
for its own account and $5.3 billion held for participants in loan syndications.
For more information, visit www.ifc.org.