Washington DC, October 4, 2001The International
Finance Corporation (IFC), the private sector arm of the World Bank Group,
today signed an agreement for a US$5 million credit line with Banco de
la Exportación (Banexpo) of Nicaragua, one of the country’s leading financial
institutions, for on-lending to local small and medium-sized enterprises
The line will provide scarce long-term funds to SMEs during a difficult
economic period for Nicaragua, which has been affected by a decline in
coffee prices as well as a drought in the northern part of the country.
These factors, along with the consolidation in the commercial banking
sector, have made it difficult for private sector companies to obtain cost-effective
funding, which will be crucial for the continued expansion and modernization
of the private sector.
Banexpo is Nicaragua’s fourth-largest private commercial bank, with assets
of $223 million, deposits of $184 million and equity of $16 million as
of June 30, 2001.
Bernard Pasquier, IFC Director of the Latin America and Caribbean Department
said that “this investment will help provide much needed funding for small
and medium enterprises in Nicaragua, supporting the efforts of local entrepreneurs
to strengthen their businesses and create jobs.” Mr. Pasquier added
that “in addition to providing long term funding, IFC will also help transfer
international best practices, particularly in environmental risk management,
to the Nicaraguan market.”
IFC’s mission 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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY01 was $14.3 billion.