The Inter-American Development Bank today announced the approval of a $20 million senior A/B loan to Banco Ficohsa in Honduras, with the goal of supporting the expansion of housing loans and credit for small and medium-sized businesses.
The loan is a component of a medium to long-term credit facility for Banco Ficohsa totalling $25 million. The second component, a subordinated loan for $5 million from the Multilateral Investment Fund (MIF), is expected to be approved shortly.
Honduras has a substancial housing deficit, and small and medium-sized companies—which generate the bulk of the country’s jobs—have limited access to credit. The new loans will help Ficohsa to expand its mortgage portfolio and issue more loans to small and medium-sized businesses. It will also help to Diversity Ficohsa’s funding sources and extend the terms of its debt obligations.
“We appreciate the vote of confidence in Banco Ficohsa that is implied by a $25 million credit facility from a world-class financial institution like the IDB,” said Camilo Atala, executive president of Banco Ficohsa. “It fills us with satisfaction to know that we have a shared commitment: to contribute to the development of Honduras and to improve the quality of life of our compatriots, since these funds will be channelled to productive sectors such as housing and small business.”
Andrea Oñate, the IDB project team leader, said: “This financing will support Banco Ficohsa’s efforts to increase the flow of credit for housing and small business in Honduras. This will also help to stimulate economic activity, since these are sectors that have high social impact in Honduras. Moreover, this project will help to expand financial democracy and will strengthen Ficohsa’s ability to manage its assets and liabilities, by extending the terms of its funding sources.”
Banco Ficohsa is the third largest bank in Honduras in terms of assets. In December 2007 it had $1.1 billion in assets and $780 million in deposits. Banco Ficohsa has developed an extensive network of 70 branches and 300 ATMs throughout Honduras, and it has earned a BBB+ rating from Fitch Ratings.