Washington, DC, June 28, 2005 — The
International Finance Corporation, the private sector arm of the World
Bank Group, will provide $5 million to Factorline S.A. in Chile to support
the company’s international factoring expansion and diversify its funding
Factorline, established in 1993, is a leading factoring company that offers
domestic and international services to small and medium enterprises in
Chile. Factoring entails the purchase of accounts receivable from companies,
with the purchasing party managing the loan collections. This financing
option provides an efficient tool for working capital management, which
is especially useful for growing smaller companies.
Jyrki Koskelo, IFC’s director for Global Financial Markets, said, “By
supporting Factorline’s international operations, IFC’s financing will
help export-oriented smaller businesses, enabling them to expand their
reach in international markets.”
Atul Mehta, IFC’s director for Latin America and the Caribbean, also noted,
“This transaction fits with our strategy in Chile to support the local
financial sector and foster financial intermediation for the benefit of
Factorline has a total portfolio of over $110 million equivalent and serves
about 1,700 clients. The company targets small Chilean businesses
that need a faster repayment of their sales receivables in order to finance
their working capital needs. It is headquartered in Santiago and has a
network of 16 branches across the country.
Factorline is very active in national and international factoring networks,
such as Asociación Chilena de Empresas de Factoring A.G., an organization
working to institutionalize and support the development of the factoring
industry in Chile, and Factors Chain International, the largest international
association of factoring companies.
Juan Mauricio Fuentes, General Manager of Factorline S.A., noted, "IFC’s
financing is critical for supporting our international operations, which
are mainly focused on the purchase of accounts receivable from small and
medium export-oriented enterprises in Chile. Today, these companies are
taking opportunities opened by Chile's trade agreements with other countries.
This growth has created a stronger need for working capital."
IFC is helping the private sector in Chile respond to a changing global
economic environment; this includes support for the government’s priorities,
particularly in the areas of growth and competitiveness. Looking forward,
IFC’s strategy for Chile will focus on high-impact areas, including support
for small and medium businesses, infrastructure, and social sectors, as
well as specialized financial market activity, including housing finance.
As of May 31, 2005, IFC’s portfolio in Chile is $235 million.
IFC's mission (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY04, IFC has committed
more than $44 billion of its own funds and arranged $23 billion in syndications
for 3,143 companies in 140 developing countries. IFC’s worldwide committed
portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion
held for participants in loan syndications.