IFC’s first investment in a Brazilian microfinance
Washington D.C., May 9 , 2002—The International Finance Corporation
(IFC), the private sector developmentarm of the World Bank Group, has approved
a US$1.25 million investment to help establish and develop Microinvest,
a regulated, commercially-based microfinance institution in Brazil that
will provide credit to local microenterprises.
IFC’s investment will help expand access to financing for low-income entrepreneurs,
helping them build their businesses and raise their standards of living.
It will also assist in institution building of one of the very few
commercially oriented, self sustainable microfinance institutions in Brazil.
Microinvest represents IFC’s first investment in a Brazilian microfinance
IFC’s transaction comprises a 25 percent share purchase of Microinvest,
while the remaining share capital will be owned by the Bank’s sponsor,
Fininvest S.A.—one of the largest finance companies in the low-income
consumer and retail credit segment in Brazil. Fininvest is a wholly-owned
subsidiary of União de Bancos Brasileiros S.A. (Unibanco).
Bernard Pasquier, IFC’s Director of the Latin America and Caribbean Department,
said, “This investment supports IFC’s commitment to strengthening Brazil’s
financial sector to enable it to provide much-needed financing to promote
the development and growth of Brazil’s incipient microfinance market and
microentrepreneurs. It also braces IFC’s efforts to help reduce
poverty by reaching out to low-income segments with formal financial products.”
This operation reflects an important aspect of IFC’s global microfinance
strategy, focused in supporting the commercial viability of microfinance
activities in developing countries. IFC believes that well-managed
microfinance institutions can - and should - be commercially viable so
that financial services can be provided to the underserved over the long
term, resulting in a substantial and sustainable increase in the volume
and range of financial services for microenterprises.
Mr. Alvaro Lopes, Director of Microinvest, added, “A large number of indicators
and statistics point to the fact that the microcredit segment in Brazil
is growing and attracting investments from the financial sector and from
several development and training institutions. Opportunities are
being constantly offered, and certainly the IFC’s partnership will contribute
to an improvement of the micro-finance market in our country, in which
process Microinvest intends to make an important contribution.”
Microentrepeneurs are an important engine of economic growth and social
development in most emerging markets including Brazil. There are
an estimated 9.5 million micro and small enterprises in Brazil. They
account for over 90 percent of all firms in the country, and provide over
35 percent of total employment in services, commerce, and industry.
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, and provides
technical assistance and advice to governments and businesses. Since
its founding in 1956, IFC has committed more than $31 billion of its own
funds and arranged $20 billion in syndications for 2,636 companies in 140
developing countries. IFC’s committed portfolio at the end of FY01
was $14.3 billion.