Washington, D.C., June 23, 2008—IFC,
a member of the World Bank Group, today signed an agreement to help Grupo
Monge Holding S.A., a family-owned retailer of household goods and electronics
in Central America, expand its operations in El Salvador, Guatemala, and
Honduras, increasing access to consumer credit for low-income customers.
IFC’s financing of up to $50 million
is its first loan in which the client has the flexibility to draw from
U.S. dollars as well as Costa Rican colones or Guatemalan quetzales through
the swap market. This will promote development of the long-term local
currency swap markets and benefit other Central American companies with
foreign exchange risk exposures on their balance sheets.
“IFC has now become an essential partner,”
said Gaston Monge, Chief Executive Officer of Grupo Monge. “IFC’s
value-added went beyond a loan with tenor and structure that were otherwise
unavailable. Their team has contributed significant advice to enhance
the quality of our operations and facilitate compliance with the environmental
and social standards of the World Bank Group.”
“IFC’s financing will support Grupo
Monge’s long-term expansion strategy to consolidate its regional market
position. IFC has played a countercyclical role in supporting Grupo Monge
at a time when access to capital markets has been difficult in Central
America,” said Atul Mehta, IFC Director for Latin America and the Caribbean.
IFC’s total committed portfolio in
Central America as of May 2008 was $719 million. IFC is expanding
its operations in this region, focusing on supporting regional integration
through private sector participation in infrastructure projects. IFC’s
strategy also looks to strengthen the financial sector by supporting access
to finance for small and medium enterprises and housing finance. IFC also
aims to help firms involved in agriculture and other services improve their
competitiveness and expand within Central America and beyond.
IFC, a member of the World Bank Group,
fosters sustainable economic growth in developing countries by financing
private sector investment, mobilizing private capital in local and international
financial markets, and providing advisory and risk mitigation services
to businesses and governments. IFC's vision is that people should have
the opportunity to escape poverty and improve their lives. In FY07, IFC
committed $8.2 billion and mobilized an additional $3.9 billion through
syndications and structured finance for 299 investments in 69 developing
countries. IFC also provided advisory services in 97 countries. For more
information, visit www.ifc.org.
About Grupo Monge
With 325 retail stores across Costa
Rica, El Salvador, Guatemala, Honduras, and Nicaragua, Grupo Monge is a
leading family-owned retailer of household goods and electronics in Central
America, with a strategic focus on reaching low- and middle-income consumers.
The company operates three lines of business: retail, which includes store
brands catering to customers in various income groups; wholesale, which
sells and distributes products, including the company’s private labels;
and consumer finance, which extends credit to customers for in-store purchases
and constitutes one of Grupo Monge’s core competitive advantages.