March 26, 2009, Washington, D.C.—IFC,
a member of the World Bank Group, today announced that the IFC Recapitalization
Fund will make its inaugural investment of $20 million in Paraguay’s Banco
Continental, which will help strengthen one of the country’s leading financial
institutions and ensure continued lending to small and medium enterprises.
The Fund, a key IFC initiative aimed at helping mitigate the effects of
the global financial crisis, will invest in Banco Continental’s preferred
stock, which is part of the bank’s Tier 1 Capital. Banco Continental,
the largest locally owned financial institution in Paraguay, provides commercial
lending products and services to SMEs and corporate clients. It also provides
consumer finance. The bank, an IFC client since 2007, serves more than
62,000 customers through a network of 31 branches located in 11 departments.
“We are pleased to continue developing our relationship with IFC and welcome
the investment from the IFC Recapitalization Fund, which is a vote of confidence
in Banco Continental," said Carlos Espínola, President of Banco Continental.
"The financing will further strengthen Banco Continental’s capital
base and allow us to continue addressing our clients’ needs throughout
Paraguay, increasing access to financial services. We also welcome the
valuable knowledge and global experience IFC will contribute to our organization.”
The IFC Recapitalization Fund, founded by IFC and the Japan Bank for International
Cooperation (JBIC) on February 2, 2009, is a $3 billion global equity and
subordinated debt fund that aims to support banks considered vital to the
financial system of an emerging market country. By supporting such systemic
institutions the fund aims to speed up economic recovery and boost job
creation while reducing the impact of the financial crisis.
Lars Thunell, IFC's Executive Vice President and CEO, said: “This inaugural
transaction by the IFC Recapitalization Fund is an indication of the Fund’s
and IFC’s commitment to the development of the Paraguayan financial system.
Systemically important financial institutions such as Banco Continental
have a significant role to play in ensuring continued lending to real sectors
of the economy and reducing the impact of the financial crisis. We are
proud of our partnership with JBIC in creating the Fund, which will allow
us to support vital banks in emerging economies.”
IFC has invested $1 billion of its own money in the IFC Recapitalization
Fund. JBIC has invested $2 billion in the fund, bringing the total to $3
billion. The Fund will provide Tier I and Tier II capital to emerging market
banks and also provide advisory services aimed at strengthening private
sector development and improving their economic and financial performance.
For more information about IFC’s financial crisis response, visit
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $16.2
billion in fiscal 2008, a 34 percent increase over the previous year. For
more information, visit www.ifc.org.
About Japan Bank for International Cooperation
JBIC is the international wing of the Japan Finance Corporation (JFC),
Japan’s policy-based financing institution established on October 1, 2008.
JBIC provides policy-based finance with a mission to contribute to the
sound development of the Japanese and international economy, in line with
Japanese government’s policies and initiatives. For more information,
About Banco Continental
Banco Continental is one of the fastest-growing banks in the country, and
has an extensive network of 31 branches across the main departments of
Paraguay. It began operations in 1980. In 2004, a group of local businessmen
and financial-sector investors acquired the bank, leading to a renovation
and expansion phase that positioned it as one of the leading institutions
in the Paraguayan financial system. Banco Continental is the largest fully
locally owned financial institution in Paraguay. For more information,