Lima, Peru, November 27, 2012—IFC
Capitalization Fund, a fund managed by IFC Asset Management Company, signed
today an investment in Dominican Republic-based Banco BHD, helping the
bank expand operations and support lending to small- and medium-size enterprises
The $25 million subordinated loan will provide BHD with Tier II capital
under local regulatory requirements. BHD expects to be able to leverage
the loan resulting in at least $100 million in new loans to help Dominican-based
businesses grow and create new jobs, particularly in the SME segment, which
constitutes approximately 30 percent of GDP and 90 percent of all the companies
in the Dominican Republic.
“In 2003, Banco BHD was the first institution to issue Tier 2 capital
in the Dominican Republic and the first banking institution to receive
financing from IFC,” said Luis Molina Achecar, Chairman of BHD Bank. “BHD
is now the first institution in the Caribbean to receive an investment
from the IFC Capitalization Fund. We are grateful for IFC’s recognition
of the strength of our business model as well as the opportunity to expand
lending to businesses in the Dominican Republic.”
IFC Capitalization Fund is a global equity and subordinated debt fund founded
by the IFC and the Japan Bank for International Cooperation. It invests
in banks considered vital to the financial system of emerging-market countries.
IFC’s relationship with Banco BHD began in 2003. Since then, IFC has engaged
with Banco BHD in three investments and one advisory project, including
an equity participation in its holding company, Centro Financiero BHD.
“Banco BHD is one of IFC’s most important clients in the Caribbean,”
according to Jean Philip Prosper, IFC’s Director for Latin America and
the Caribbean. “By supporting it with subordinated debt, IFC will boost
the bank’s capital, allowing it to grow into additional market segments,
most specifically the under-banked micro, small, and medium-enterprise
sector, which will benefit those persons at the bottom of the pyramid and
improve access to finance in the country.”
The investment is aligned with the World Bank and IFC’s Country Partnership
Strategy in the Dominican Republic, which aims to strengthen linkages with
existing clients by supporting their sustainability and enhancing their
access to finance. It is also aligned with IFC’s Caribbean strategy to
promote economic development through crisis response and financial inclusion.
“The investment provides a unique opportunity to partner with BHD, a leading
Dominican Republic bank, via the use of an innovative product that will
help position the bank for future growth,” said Marcos Brujis, Head of
the IFC Capitalization Fund.
Over the last three years, IFC invested $638 million in the Caribbean.
In 2011 alone, IFC created over 28,000 jobs in the region and reached more
than 130,000 patients, 2,300 students, and 4 million customers through
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 IFC Asset Management Company
IFC Asset Management Company LLC, a wholly-owned subsidiary of IFC, invests
third-party capital, enabling outside investors to benefit from IFC’s
expertise in achieving strong equity returns, as well as positive development
impact in the countries in which it invests. It manages the $3 billion
IFC Capitalization Fund, founded by IFC and the Japan Bank for International
Cooperation; the $1 billion IFC African, Latin American, and Caribbean
Fund; and the $182 million Africa Capitalization Fund.
Banco BHD is the second largest private commercial bank in the Dominican
Republic. The Bank is a subsidiary of Centro Financiero BHD, a diversified
financial services company whose activities include commercial banking,
consumer and micro finance, pension funds, insurance, remittances and private
Japan Bank for International Cooperation (JBIC) is a policy-based financial
institution wholly owned by the Japanese government. JBIC contributes to
the development of Japan and the international economy by promoting overseas
development and securing resources which are important to maintaining and
improving the international competitiveness of Japanese industries and
overseas businesses. It strives to preserve the global environment, while
supplementing financial transactions implemented by financial institutions.
JBIC also provides the financial services necessary to prevent disruptions
to international financial order, and takes appropriate measures with respect
to damages caused by such disruptions. For more information, visit www.jbic.go.jp/en.