Cartagena, Colombia, May 19, 2008—IFC,
a member of the World Bank Group, today signed an agreement to invest in
Finandina S.A., a leading car financing and leasing company in Colombia
that serves micro and small transportation business owners. This investment
will help expand the company’s reach and support the transportation sector,
which is essential to the country’s export-oriented growth.
IFC's equity investment of up to 10
percent (up to $17 million equivalent) in Finandina marks a first step
in building a long-term strategic alliance with the firm. IFC’s participation
as an independent shareholder will also help strengthen the firm’s corporate
governance and facilitate a potential listing in the local exchange.
“The support from IFC will help us
strengthen our bond issuance program, which will offer our clients a greater
portfolio of products tailored to meet the needs of small and medium companies.
It will also allow us to accelerate our expansion, with new branch offices
and corporate plans,” said Carlos Vegalara Franco, President of Finandina.
Colombia’s banking penetration is low
compared to international standards, and small and medium enterprises have
limited access to financial services. Expanding access to finance for the
transportation sector is vital to sustaining economic growth in the country.
By partnering with Finandina, IFC will help expand the range of financial
services for smaller businesses that are active in the sector, helping
improve the country’s freight distribution capacity.
Atul Mehta, IFC Director for Latin America
and the Caribbean, said, “IFC’s equity financing will help strengthen
Finandina as a key player that provides innovative solutions to small business
owners in Colombia’s transportation sector. This investment is also part
of IFC's strategy of supporting the country’s efforts to improve transportation
infrastructure and logistics.”
IFC’s total committed portfolio in
the country as of April 2008 was over $1,073 million.
IFC’s strategy for Colombia supports
sectors that are essential to the country’s financial development. This
includes financing infrastructure projects involving public-private partnerships,
such as ports, roads, and airports, as well as supporting logistics companies.
IFC also aims to help leading Colombian groups modernize and expand their
businesses internationally. Improving access to finance for micro, small,
and medium enterprises is also at the core of IFC strategy in the country.
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.
Finandina is a nonbanking financial
institution that specializes in leasing automotive vehicles. Headquartered
in Bogota, the company also has branches in Barranquilla, Bucaramanga,
Cali, Ibagué, Medellín, and Villavicencio. As of March 2008, it had assets
of $635,000 million pesos. Finandina is rated BRC 1+ for its short-term
bond issuance and CDs and rated AA+ for its long-term products, according
to BRC Investor Services.