Bogotá, Colombia, March 3 2016 — IFC,
a member of the World Bank Group, strengthened its support to Colombia’s
small and medium sized enterprises (SMEs) with a new US$80 million loan
to Banco Pichincha, a bank that strives to sharply boost its lending to
Colombian SMEs and low-income students.
IFC’s loan, which consists of US$50 million
from its own account and $30 million to be mobilized by IFC from other
investors, will also reinforce Banco Pichincha’s role as a private-sector
leader in student loans in Colombia. IFC’s loan is expected to help
Banco Pichincha nearly triple its loans to SMEs by 2019 and also increase
its portfolio of tertiary education loans.
“IFC’s support to our institution will
help us continue to expand our work with SMEs and ensure that they are
able to access financing for their operations and growth in Colombia,”
said Eduardo Fernández-Salvador, Banco Pichincha’s chief executive officer.
“This loan will also bolster our education lending for lower to middle
income students, which creates a path for social mobility and can open
doors to better, more stable and higher paying jobs,” he said.
For IFC, the loan to Banco Pichincha is part
of its efforts to boost financial inclusion in Colombia. Recent data suggests
that only 53 percent of SMEs in Colombia have an outstanding loan or line
of credit with a financial institution, compared to 79 percent in Chile.
Boosting financial access for SMEs is crucial to the country’s sustainable
growth as they are key driver of economic activity and job creation.
The loan will also help boost access to tertiary
education in Colombia, an area where the country has made great progress
but where many challenges remain. Coverage for tertiary education in Colombia
remains significantly lower than member countries of the Organization for
Economic Co-operation and Development (OECD), something which is partly
attributable to lack of financing options for potential students.
Pichincha can help close this gap as it is
a major player in providing student loans in Colombia. The bank maintains
a relationship with over 480 tertiary education entities in 32 cities in
the Country and finances approximately 94,000 students each year.
The loan is part of wider engagement by IFC
with Grupo Pichincha, the Ecuador-based holding group that controls Banco
Pichincha in Colombia, and which also has operations in Peru, Panama, the
United States and Spain. The group is focused on increasing access to finance
to low income households and SMEs, making it a strategic partner for IFC
in the Andean Region.
“Our long-term partnership with Pichincha
helps to reach low-income sectors of the population and to create a more
inclusive financial sector in Colombia,” said Carlos Leiria Pinto, head
of IFC for the Andean region. “With this project, IFC reinforces its compromise
with the sustainable economic development of Colombia and the use of our
resources to increase access to credit,” he said.
In Colombia, IFC is engaged in supporting
sectors essential to social and economic development, such as infrastructure,
health, education, agribusiness, and public-private partnerships to build
ports, roads, and airports. IFC also promotes access to finance for micro,
small, and medium enterprises, and works on improving the investment climate
by simplifying regulations and royalty management.
IFC, a member of the World Bank Group, is
the largest global development institution focused on the private sector
in emerging markets. Working with more than 2,000 businesses worldwide,
we use our capital, expertise, and influence, to create opportunity where
it’s needed most. In FY15, our long-term investments in developing countries
rose to nearly $18 billion, helping the private sector play an essential
role in the global effort to end extreme poverty and boost shared prosperity.
For more information, visit www.ifc.org