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IFC Supports Housing Finance Sector in Peru


Contacts:
Adriana Gomez
Phone: (202) 458-5204

Fax:      (202) 974-4384

E-mail:  
agomez@ifc.org        

Shamsher Singh/ Matias Eliaschev

Phone:  (202) 473-1418/2702        

Fax:       (202) 974-4393        

E-mail:  
ssingh@ifc.org/meliaschev@ifc.org


Lima, March 29, 2004—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed an agreement to provide US$40 million to Banco Internacional del Peru – Interbank , to help expand the nascent housing finance market in Peru.

IFC is providing a US$40 million warehouse line of credit to Interbank to support its mortgage lending operations and its planned mortgage-backed securitization program. IFC’s relationship with Interbank began in 1997 when IFC made an “A” loan of US$20 million and a “B” loan of US$100 million funded through a structured US commercial paper program to provide long-term financing to middle market companies in Peru.


The agreement was signed today in Lima by Marcos Brujis, Manager of Business Development in IFC’s Latin America and Caribbean Department, and Ismael Benavides Ferreyros, Chief Executive Officer of Interbank.


This investment is part of IFC's strategy to develop Peru's housing finance sector by increasing mortgage origination.  IFC's financing will promote competition and stimulate growth in the housing sector by providing affordable housing finance to Peruvian households, and develop the country's financial markets by expanding an important asset class.  


"The development of broad-based housing finance market is an important building block of the country's financial sector.  A functioning mortgage system will help create a more liquid housing market and enable more first-time buyers to purchase their own property. In addition, the development of the market will create employment in the construction sector and related industries" said Marcos Brujis at the signing ceremony in Lima.


Mr. Benavides Ferreyros said “We are extremely pleased with the fine partnership we have developed  with the IFC. IFC's investment is a vote of confidence in Interbank and in the future of the Peruvian financial markets.”


Mark Alloway, Senior Manager of IFC’s Global Financial Markets Department, added “Housing  finance is at the heart of IFC's strategy to strengthen finance institutions in Peru, and by supporting Interbank, IFC will help provide suitable and affordable housing for the Peruvian population. IFC's investment in Interbank will help provide a demonstration effect on the Peruvian banking sector seeking future long-term funding for housing finance”


Interbank is the fourth-largest commercial bank in Peru, offering a wide range of banking services to its more than 520,000 clients. As of December 2003, Interbank had a total of 8.6% of the deposits and 9.6% of the loans of the banking system.  Interbank services its clients through a branch network of 90 “financial stores,” with a national presence, including service centers in the country’s largest retail stores. Interbank also has 400 ATMs , a telemarketing center, phone banking and access through the Internet. This transaction complements the bank’s current strategy focused on developing strong mortgage and consumer banking franchises. Currently Interbank is the leader in consumer banking in Peru and seeks a similar position in the mortgage market.


IFC’s strategy in Peru focuses on supporting sectors that provide the greatest benefit to the Peruvian private sector, in particular via the development of financial and physical infrastructure, and supporting competitive manufacturing and services companies.  The proposed project fits well with IFC’s strategy as it will help the development of the incipient housing finance sector in Peru. It will also support the development of the local capital markets by building a securitizable pool of mortgage assets which will eventually benefit the Peruvian capital markets.


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 FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.