Sep 8, 2010
Banco Promerica de Costa Rica to increase mortgages and loans for green projects with IDB support
$15 million IDB loan is the first to a Costa Rican financial institution that seeks to expand its mortgage and green financing business
The Inter-American Development Bank (IDB) approved a $15 million loan to Banco Promerica de Costa Rica to help the bank expand its long-term mortgage operations and loans for environmentally sustainable projects.
The IDB loan will broaden and deepen the scope of Promerica’s key business areas, specifically in home mortgage financing for lower middle-income and middle-income individuals, as well as develop the portfolio of environmentally sustainable loans (“green loans”). The facility is part of the IDB’s strategy to support two high-impact areas of economic development.
“Through mortgage financing, the project responds to an increased demand to channel resources to a population with traditionally limited access to credit for housing.” said Daniela Carrera Marquis, head of IDB’s Financial Markets Division. “The “green loans” help increase investment and sustainable banking practices in Costa Rica, in this manner fostering environmental, social and economic benefits.”
Banco Promerica will improve opportunities for the middle-income segment to buy residential property, thus entering a new market and downscaling from its more traditional operations, oriented towards a higher income segment. This financing will allow Banco Promerica to meet the growing need for home mortgage financing from middle-income families.
“This type of financing helps an institution that is committed to serving priority areas in the development of Costa Rica, like housing and loans for “green projects,” said the head of the project team at the IDB, Jacobo De Leon.
With respect to the green loans, Banco Promerica strives to increase its portfolio and expand sustainable environmental projects. This is a new market, that counts on a limited volume of resources and that is in line with the IDB’s beyondBanking program, which encourages the principle of sustainability among financial institutions in Latin America and the Caribbean.
“It is of vital importance for Banco Promerica de Costa Rica to join a strategic partner with the prestige of IDB. The resources this organization provides are fundamental to our plans for growth in these sectors so relevant to the national economy as are residential financing and projects that contribute to the conservation of the environment”, said John Keith, Executive President of Banco Promerica de Costa Rica.
About Banco Promerica
Banco Promerica forms part of a regional network that includes financial institutions in Guatemala, Honduras, El Salvador, Nicaragua, Panama, Dominican Republic and Ecuador. As a medium-sized institution in the context of The private bank segment in Costa Rica, it has 16 branches, mainly located in the Greater Metropolitan area of San Jose. Since joining the IDB’s Trade Finance Facilitation Program (TFFP), Banco Promerica has become an active participant of the program, acting as an issuing and confirming member.
The Inter-American Development Bank is the principal source of long-term financing for projects of economic development in Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for projects without sovereign guaranties that include loans and partial credit guaranties for clients in both the private and public sectors.