Washington, D.C./ Cali, Colombia, October
a member of the World Bank Group, purchased bonds issued by Giros y Finanzas
S.A in Colombia with a value of11,500 million Colombian pesos (US$6
million equivalent) to help the company expand affordable housing
and working capital loans to low income borrowers. This is the first time
that IFC purchases bonds issued by a company in Colombia. One big advantage
when compared with a regular loan is that the bonds allow the company to
give affordable interest rates to its clients.
Giros y Finanzas is a local remittance
distributor that provides financing to the most underprivileged segment
within Colombian society, reaching out more than 350,000 clients across
the country. Through its services, it helps clients establish small businesses
and improve their living standards. Many of GyF clients are women who depend
on remittances from family members living abroad.
“With this new financing instrument,
IFC will help Giros y Finanzas to continue reaching out to the most remote
areas and a population who do not have access to other sources of financing.
We have the capacity and the network to deliver financial services to this
market segment. IFC is the right partner to achieve our objectives,” said
Hector Fabio Rodriguez, CFO of Giros y Finanzas.
Roberto Albisetti, IFC country manager
for the Andean Region, said, “This operation is consistent with IFC’s
global remittances strategy that aims to support sound institutions to
develop financial products linked to remittances and support access to
housing, education, business funding, and insurance services. Our investment
in GyF represents one of IFC’s first endeavors to help leverage remittances
to increase access to finance for small businesses and home owners”.
The volume of remittances in Colombia
has been increasing steadily. According to Colombia’s Central Bank, the
country received more than US$4.84 billion in remittances during 2008,
a one year growth of 7.8%.
IFC’s strategy in Colombia focuses
on supporting sectors that are essential to social and economic development,
including infrastructure, health, education, and public-private partnerships
to build ports, roads, and airports. IFC assists leading Colombian companies
modernize and expand their businesses internationally. IFC also promotes
access to finance for micro, small and medium enterprises and works on
improving the investment climate by simplifying regulations and royalty
management. As of June 2009, IFC’s committed portfolio in the country
was over $1 billion, its third largest in the Latin America and the Caribbean
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $15
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
About Giros y Finanzas
Giros y Finanzas (GyF) is a Colombian
financial institution based in Cali, Colombia. Established in 1996, GyF
is focused on the remittance business. The company offers its clients:
distribution of national and international remittances as agents of Western
Union; foreign exchange operations; deposits; maintaining a trading desk
(investing excess cash to give liquidity to the institution); and lending.
In the latter, the company grants car loans, leasing, factoring, and other
type of consumer loans to money remittance beneficiaries.