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News Releases

Feb 15, 2011

IDB, Oikocredit, Incofin and Calvert Foundation back credit cooperative in Ecuador

Innovative financing arrangement between IDB and Impact Investors gives Ecuadoran rural communities the tools to grow and thrive

The Inter-American Development Bank (IDB) has closed a $9 million syndicated loan with Jardin Azuayo, a community-based savings and loan cooperative in Ecuador. The loan will fund the co-op’s Credits for Community Development project, which channels funds to municipalities, community organizations and other local entities to finance improvements in social infrastructure such as schools and roads.

The loan consists of an A Loan of US$3 million, funded by the IDB’s Opportunities for the Majority Initiative, and a B Loan of $6 million, funded by a group of leading impact investors, comprised of Incofin, Oikocredit and Calvert Foundation.

Oikocredit provided $3 million while Incofin provided $2 million and Calvert Foundation another $1 million for the B Loan. The IDB’s portion of the loan has a tenor of 7 years, while the B Loan has a tenor of 5 years. The transaction marks the longest tenor ever for an international syndication to an Ecuadoran microfinance institution. The IDB was the lead arranger in this transaction.

The Jardin Azuayo Cooperative is based in a largely rural area of remote villages. Its microloans support a wide variety of projects, from educational programs to infrastructure improvements and development of small businesses. Through a branch system, it tailors its products and services to meet the specific needs of members in each of its communities.

“Jardin Azuayo creates local jobs by hiring villagers to administer its programs, gives people the chance to serve as leaders within their own communities, and helps ensure that programs and projects financed by the co-op are implemented effectively and appropriately,” states Johnny Jiron, the IDB Investment Officer, who helped structure the operation.

“With the syndicated loan from the IDB, we will be able to continue our expansion to support community development,” states Jardin Azuayo’s President Paciente Vásquez. The IDB loan to the cooperative will support road construction, renovation of public schools, creation of public spaces like marketplaces and parks and installation of water treatment systems. The loan will help fund an estimated 250 such endeavors.

“The IDB has built a very close relationship with impact investors, which has allowed us to mobilize funding to projects that many traditional investors would not have an appetite for, such as Jardin Azuayo in Ecuador,” explains IDB Syndication Officer Kristin Dacey, “We are very proud to be able to help connect these investors with companies that have socially responsible and financially sound business models.”

About Jardin Azuayo

In 1993, a disaster caused a landslide and a widespread flooding that devastated the region around the city of Paute in southern Ecuador, taking lives and destroying property in its path. Out of a belief that the community itself was best able to determine what was needed to help them not only rebuild, but grow and prosper, the Jardin Azuayo Cooperative was founded in 1996 as a savings and loans co-op dedicated to meeting the needs of this underserved area. Today, it boasts $190 million in assets, and some 180,000 co-op members. Its profits are re-invested into its projects.

About IDB

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 Opportunities for the Majority Initiative promotes and finances market-based, sustainable business models that engage private sector companies, local governments and communities in the development and delivery of quality products and services for the majority of the population of Latin America and the Caribbean. Its purpose is to improve the quality of life of low-income communities.

More Information

Kristin Dacey
IDB Syndications Officer
kristind@iadb.org

Johnny Jiron
IDB Investment Officer
johnnyj@iadb.org

Press Contact

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