Washington, DC/ Bogota, May 25, 2006–The
International Finance Corporation, the private sector arm of the World
Bank Group, will provide $50 million to Fundación Social in Colombia to
help expand its operations providing access to credit for small companies.
This transaction will continue to strengthen the partnership between IFC
and Fundación Social, entities that share a strategic interest in furthering
Colombia’s economic development, in particular that of the lower-income
population and small entrepreneurs. IFC’s operation will allow Fundación
Social to grow its microfinance portfolio to more than US$37 million and
reach over 53,000 clients over the next five years.
IFC’s financing, part of which has the option to convert into equity of
different companies of Fundación Social, aims to leverage the foundation’s
expansion strategy for its business organization. This operation follows
IFC’s equity participation in BCSC, the largest company of the Fundación
Roberto Albisetti, IFC’s Country Manager for Colombia, said, ”For IFC,
the ongoing support to Fundación Social reflects our strategy in Colombia
of facilitating access to finance for medium- and low-income segments of
society. The development of the country’s small and medium enterprises
is crucial for generating jobs, creating opportunities, and improving the
people’s quality of life.”
“The strengthening of the relationship with IFC is a very important step
for the Fundación. We have worked for over a century on a business
model for overcoming the structural causes of poverty in Colombia. This
mission relates to the objectives of IFC and its development strategy,”
pointed out Alvaro Dávila Ladrón de Guevara, President of Fundación Social.
IFC in Colombia
IFC’s total portfolio in Colombia was
$280 million as of June 2005. Since Colombia joined IFC in 1956,
the Corporation has provided $1.4 billion, including syndications, for
The financial sector is one of IFC’s priorities in Colombia, with special
emphasis on housing finance and microfinance, as well as strengthening
local capital markets and improving corporate governance. IFC’s strategy
includes also increasing support to strategic sectors for economic growth
in the context of free trade agreements, such as infrastructure projects,
port expansion, road and airport concessions, and support to companies
in the logistic services sector.
About Fundación Social
IFC has found in the business area of
Fundación Social a strong local ally in Colombia, given its track record
and over 95 years’ experience in managing different types of businesses
(including banks and insurance and real estate companies) and in developing
successful strategies for the low- and middle-income population sectors,
where it is a leading actor.
The Fundación Social Group comprises, among other companies, the BCSC bank,
with its networks Banco Caja Social BCSC and Colmena BCSC; Riesgos Profesionales
Colmena; Capitalizadora Colmena; Fiduciaria Colmena; and Deco Construcciones.
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the other
institutions of the World Bank Group but is legally and financially independent.
Its 178 member countries provide its share capital and collectively
determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition 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 FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.