Small and medium-size banks
Through the Inter-American Investment Corporation (IIC), the IDB Group finances the development, expansion and modernization of small banks, leasing companies, micro lenders and other financial institutions.
The IIC has a varied and innovative range of products and an open policy of sharing technical know-how with its stakeholders and transferring best practices to its business partners. The IIC also participates as an investor in private capital funds. Its financial solutions are adapted to each client’s needs.
The IDB Group also makes efforts to attract other financial institutions to participate in co-financing. The IIC provides portions of loans for projects that require large-scale financing. Additional funds come from participation in loans by third-party institutions.
- Financial institutions have access to loans for expansion and working capital, financial and operational leasing and international trade.
- A/B syndicated loans and agency lines are provided, as well as guarantees for loans and issues of securities.
- Commercial banks, leasing companies, financial companies and other financial services companies with assets of up to US$ 500 million.
- The investment funds must focus mainly on SMEs and must be managed by experienced executives. They must also have a defined strategy and investment parameters and proven capacity to attract capital, among other conditions.
Financing the Expansion of Banco Improsa
Banco Improsa is an efficient Costa Rican niche bank with a wide range of products and a solid background, serving small and medium-size enterprises. Eighty percent of its client portfolio is made up of companies with annual sales under US$ 4.5 million. Improsa is a private entity, majority-owned by Costa Rican investors.
The first IIC loan to Banco Improsa, approved in 2000, provided medium- and long-term financing for SME projects. This was the first long-term financing that Improsa received and it had a significant catalyzing effect, encouraging other bilateral and multilateral institutions to lend to the bank and to other financial institutions in order for them to begin operating with SMEs.
In 2005, the IIC’s partial guarantee of a bond issue enabled Improsa to successfully place debt instruments on the Panamanian stock exchange. In 2007, the IIC provided another US$ 10 million for the bank to finance 125 mortgage loans aimed at middle-income people who, in some cases, were its own clients.
The IIC maintains indirect equity interest in Banco Improsa through its investment in Probanco, a capital fund administrated by Darby.
Regional, a specialized bank
Banco Regional is a local bank with a huge presence in the most productive regions of Paraguay and an excellent background in the agricultural sector. In 2003, the IIC approved a US$ 1 million medium-term loan in order for the bank – owned by Paraguayan investors – to provide working capital to small and medium-size agricultural companies. These funds were to be used to finance the sowing and harvest of soy and wheat.
In early 2008, the Rabobank Group of Holland acquired 40% of Banco Regional shares. The operation made the institution one of the biggest specialized banks in the region. The IIC played a major role in this relationship.