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Large financial intermediaries

Doing business with the IDB Group

The IDB’s Structured and Corporate Finance Department (SCF) partners with commercial banks, institutional investors and other financial intermediaries to provide financing and risk management solutions in Latin America and the Caribbean. SCF offers co-financing opportunities for institutional investors in a broad array of transactions. SCF's reimbursable and non-reimbursable funds are tailored to the needs of each project and client. These projects must have a strong developmental impact in local economies and offer financial additionality.

The IDB Group offers medium to long-term financing for large financial intermediaries investing in key social impact sectors such as housing, the corporate sector, the micro, small, and medium enterprises, and sustainability lines, including energy efficiency, renewable energy and waste and water treatment. Furthermore, IDB supports the creation of the banking of the future through loans, guarantees and technical cooperation programs aimed at promoting sustainable environmental, social and corporate governance principles within financial intermediaries in the region.

Target Clients: Financial intermediaries

  • Banks (with over US$ 500 million in assets)
  • Investment funds
  • Non-bank financial intermediaries
  • Securitization companies
  • Insurance companies

Scope


Sectors

  • Housing
  • Corporate, SMEs and micro enterprises
  • Sustainability Lines
  • Foreign Trade – TFFP
  • Capital Markets

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Available products

Dollar-denominated and local currency:

The SCF Department provides a variety of financial products and works with the private and public sectors to establish a wide assortment of secured instruments in dollars and various local currencies.

Our basic products include:

  • Senior Loans
  • Subordinate Loans
  • Guarantees

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General selection criteria

  • The project must contribute to the development of the borrowing member countries of the IDB Group
  • Be located in an IDB Group borrowing member country
  • Citizens of IDB Group member countries must have majority control of the company
  • The private partner must demonstrate solvency, have experience in similar projects and maintain high standards of corporate governance
  • Comply with IDB Group environmental and social requirements
  • Meet IDB procurement standards
  • The IDB Group limits the amount of its non-sovereign guaranteed transactions and requires counterpart funds

For a more complete description of the general criteria, click here.


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Environmental and social requirements

Each project presented to the SCF Department must be evaluated, approved and monitored in strict compliance with environmental, social, safety, health and labor standards.

These measurements are aimed at ensuring that the projects are viable and sustainable, maximizing their benefits and mitigating or controlling their risks and impacts.


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Development effectiveness

As a development Bank, when the IDB provides financing to either public or private companies and financial institutions, it seeks to ensure that it makes a positive contribution to the economic and social development in the region. In order to ensure the development effectiveness of its Non-Sovereign Guaranteed (NSG) Operations, the IDB focuses on four key areas: development impact of projects; projects' consistency with the IDB Group's strategic objectives; value added by the IDB (additionality); and IDB's operational effectiveness. Based on these areas, the SCF Department has been implementing a framework in order to focus on high developmental impact projects and to measure their performance throughout the project cycle.

To know more about development effectiveness at the IDB, click here.


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Project highlights

A/B Loan to Banco Ficohsa

Banco Financiera Comercial Hondureña (Ficohsa), the third largest bank in Honduras, received a US$ 25 million credit facility from the IDB to expand its long-term lending capacity and mortgage portfolio, and to issue more loans to small and medium-sized businesses.

The facility includes a US$ 17 million A loan from the IDB. This amount includes US$ 5 million from the Multilateral Investment Fund (MIF). The B loan will be provided by a partner financial entity.

Support for these sectors complements the IDB’s strategy in Honduras, which includes reducing the housing shortage by improving the competitiveness and efficient development of the private sector. The loan also helps Ficohsa, a key player in financing Honduran SMEs, by expanding its access to the international financial market, diversifying its funding sources, supporting its liquidity and, since this is a long-term facility, reducing its liquidity gap.

Risk-sharing Facility for FCIB

The IDB is supporting the First Caribbean International Bank Ltd. (FCIB) in the creation of a US$ 200 million risk guarantee fund to reduce the risk exposure of its portfolio of new and existing loans. FCIB will provide loans denominated in dollars or in local currency to private sector lenders and other entities without sovereign guarantees.

The facility will finance ventures in tourism, infrastructure and business with high potential to generate jobs and stimulate productivity. The IDB is providing FCIB with a partial credit guarantee for its risk exposure with this loan. This guarantee could cover up to 50% of the amount of the loan for up to 20 years.

This type of long-term financing is essential for the sustainability of economic growth and the efficient development of the private sector in the region. Initially, the facility will focus on transactions in Jamaica, but coverage could be extended to other IDB member countries where FCIB operates, such as Bahamas, Barbados, Belize and Trinidad and Tobago.


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beyondBanking: banking on global sustainability

Aimed at promoting sustainable environmental, social and corporate governance principles in the region, the program beyondBanking: banking on global sustainability proposes engagement with Latin America and the Caribbean financial intermediaries through six core areas of financial and technical cooperation:

  • accessBanking: Promotion of financial deepening strategies
  • clearBanking: Strengthening of corporate governance, risk management, and regulatory compliance practices
  • connectBanking: Dissemination of new information and communication strategies
  • equalBanking: Promotion of gender equality and diversity in financial institutions
  • learnBanking: Promotion of economic inclusion through financial education
  • planetBanking: Adaptation and response to the effects of climate change, reducing the environmental footprint of financial institutions

For a complete program description, click here


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