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IFC Supports Small Business Growth in the Dominican Republic with $5 Million Loan to FONDESA


In Washington, D.C.:
John McNally

Phone: (202) 458-0723

E-mail:
jmcnally@ifc.org

Vanessa Bauza

Phone: (202) 458-1603
E-mail:
vbauza@ifc.org


Santo Domingo/Washington, D.C., December 12, 2012—IFC, a member of the World Bank Group, today announced a five-year, local-currency loan of 195 million Dominican pesos  (approximately $5 million) to Fondo Para el Desarrollo, Inc (FONDESA). The loan will enable FONDESA to increase its financing for micro-entrepreneurs in the Dominican Republic and strengthen micro-finance services in rural areas, where there is lower banking penetration.

FONDESA, a non-governmental organization with plans to transform into a fully-regulated financial institution in the next year, was created in 1982 to provide financial services and technical assistance to micro-entrepreneurs across the Dominican Republic. IFC’s investment in FONDESA aligns with the World Bank and IFC’s Country Partnership Strategy in the Dominican Republic, which aims to support sustainability and promote access to finance.

“FONDESA provides loans to small entrepreneurs and creates an opportunity for rural and underserved populations to participate in the country’s economic growth,” said Cristian Reyna, Chairman of FONDESA. “Since IFC is a global leader in microfinance, we look forward to beginning a long-term partnership that can ultimately benefit and expand our offerings to our clients.”

“The Dominican economy is one of the most dynamic in the region and micro-enterprises play a key role in economic growth and poverty alleviation,” said Jun Zhang, IFC Regional Manager for the Caribbean. “IFC’s financing to FONDESA will help them expand their micro-enterprise loan portfolio and aligns with IFC’s Caribbean strategy to promote economic development through financial inclusion.”

The investment is funded with proceeds from the IFC Taino Bond, which was issued earlier this month. The bond is IFC's first domestic issue in the Dominican Republic and raised 390 million Dominican pesos (approximately $10 million). It is also the first IFC bond in Latin America and the Caribbean whose proceeds are directly linked to investments in the local private sector, creating access to local-currency finance while providing a viable channel for domestic savings to be directed into productive long-term investments.

Over the last three years, IFC has invested $638 million in the Caribbean. In 2011 alone, IFC’s clients supported more than 28,000 jobs in the region and reached more than 130,000 patients, 2,300 students, and 4 million customers through power generation.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.

About FONDESA
FONDESA is an NGO with plans to convert to a savings and credit bank in the next year. FONDESA was created in 1982 by the Asociación para el Desarrollo – APEDI, which is also an NGO established in 1961 with the objective of promoting the economic and social development of the Dominican Republic. APEDI has a long track record of creating several institutions that promote progress and development. FONDESA is headquartered in Santiago, the second largest city in the Dominican Republic, with operations in 16 provinces of the country through 36 branches. FONDESA provides micro-loans in the regions where these branches are located and, furthermore, is expected to expand its microfinance operations to other municipalities in the upcoming years.

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