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Costa Rica’s Banco BAC San José to expand mortgage lending and credit to SMEs with IDB support

Banco BAC San José S.A., Costa Rica’s largest private bank, will get a loan of as much as $40 million from the Inter-American Development Bank (IDB) to expand mortgage financing and lending to small and medium-sized enterprises (SMEs).

The IDB loan will provide Banco BAC with longer term financing that will allow the bank to offer mortgages to middle and lower middle-income families. It will also pave the way for BAC to boost long-term ending to SMEs, a market segment currently underserved by commercial banks in the country.

“By promoting greater financial inclusion, this project seeks to address important gaps in much needed medium- and long-term funding for local small and mid-size enterprises, key contributors to the economy and an important driver for employment in Costa Rica,’’ said Daniela Carrera-Marquis, Chief of the Financial Markets Division of the IDB's Structured and Corporate Finance Department. “In addition, by targeting mortgage financing to middle and lower middle-income families, the project responds to an increased demand to channel resources to a population with traditionally limited access to credit for housing.”

“It’s of great importance for BAC Credomatic de Costa Rica Group to have the support of the IDB, especially given the limited depth of the Costa Rican capital markets. This long-term financing, which confirms the IDB’s trust in our institution, will allow us to meet important investment needs of small and medium-sized enterprises, as well as the mortgage needs of our middle-income clients. We take pride in this pioneering transaction in the Costa Rican financial sector,” said Gerardo Corrales, Executive Vice-President of BAC Credomatic de Costa Rica.

The IDB loan is part of the beyondbanking Program, which seeks to promote sustainable environmental, social and corporate governance principles among Latin American and Caribbean financial intermediaries through financial and technical cooperation.

Banco BAC is the largest private-sector bank in Costa Rica and forms part of one of the most important regional financial groups in Central America, with operations in Panama, Nicaragua, Guatemala, Honduras, and El Salvador, In 2010, the group was acquired by Banco de Bogotá, which is part of Grupo Aval, the largest financial conglomerate in Colombia.

About the IDB’s Structured and Corporate Finance Department

The Structured and Corporate Finance Department is responsible for the IDB’s non sovereign guaranteed operations for large-scale projects. Its Financial Markets Division, which runs the beyondBanking program, focuses on projects aimed at developing more inclusive, transparent and environmentally responsible financial sector operations in Latin America and the Caribbean.

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