Bogota, Colombia, May 20, 2014—IFC,
a member of the World Bank Group, officially launched in collaboration
with Colombia’s Superintendence of Corporations and the Colombian Federation
of Chambers of Commerce (Confecamaras) a secured lending platform in Colombia
that will greatly expand financing to micro, small and medium sized
The new framework, which allows borrowers
to obtain loans by using as collateral resources such as their inventory,
machinery or crops, has generated more than $5 billion in loans since starting
operations in March and more than 104 financial institutions have registered
to act as lenders.
“With this new tool we expect that entrepreneurs
in Colombia will have easier access to loans, with improved time frames
and lower interest rates,” said Luis Guillermo Velez Cabrera, Colombia’s
superintendent of Corporations. “The collateral registry will drive an
increase in financial access.’’
Many small enterprises in Latin America and
the Caribbean lack the necessary collateral to receive loans from the formal
banking sector. That is also the case in Colombia, where the IFC worked
in a three year partnership with the Superintendence of Corporations to
develop the legal and institutional frameworks that govern secured transactions
with a view to transforming the local credit culture.
'With this reform Colombia has taken an important
step to expand financial inclusion and open its doors to new investments,’’
said Juan Gonzalo Flores, IFC’s acting Regional Manager for the Andean
Region. “Access to finance is essential for the productive sector and
because of the importance of small and medium enterprises in the economies
of Latin America and the Caribbean, this reform is going to drive the development
of Colombia and serve as an example to the region.”
Difficulty in accessing loans from the financial
sector is often cited in Latin America as a key obstacle for small and
medium sized enterprises. A 2010 survey in Colombia, for example, showed
that 40 percent of businesses polled viewed lack of credit as the main
impediment to growth and competiveness.
Collateral provides the basis for free-flowing
credit markets by reducing potential losses lenders face from non-payment.
While land and buildings are often used as collateral for loans, the use
of movable assets is restricted because many countries do not have the
required laws and systems for these transactions.
Previous experiences show that strengthening
these platforms for movable assets lending in emerging economies can have
a dramatic impact in economic development by providing the regulatory structure
that enables small business owners to use assets they do have such as inventory,
crops or equipment as collateral to obtain loans.
The positive outcomes generated by these
changes include sustainable economic growth, job creation and ensuring
broad based financial inclusion. That is already the case in Colombia,
where some of the country’s largest banks have started to provide loans
accepting as collateral items such as embroidery machines, milking equipment
and rice crops.
IFC has worked with partners in more than
20 countries to help establish modern, web-based collateral registries
to overcome lending constraints and increase the availability of credit.
IFC, a member of the World Bank Group, is
the largest global development institution focused exclusively on the private
sector. Working with private enterprises in more than 100 countries, we
use our capital, expertise, and influence to help eliminate extreme poverty
and promote shared prosperity. In FY13, our investments climbed to an all-time
high of nearly $25 billion, leveraging the power of the private sector
to create jobs and tackle the world’s most pressing development challenges.
For more information, visit www.ifc.org