Loan proceeds and technical resources to Banco Pichincha will benefit women-owned SMEs in Ecuador and promote more inclusive financing models
The Inter-American Development Bank (IDB) disbursed this week $5.1 million of a $12.8 million loan to Banco Pichincha in Ecuador—the first transaction under the IDB’s recently launched women entrepreneurshipBanking (weB) initiative.
This disbursement is part of the $51.5 million subordinated A/B loan approved to Banco Pichincha under the LACC Subordinated Debt Facility. The IDB’s portion of the financing, known as the A loan, totals $40 million, which includes $12.8 million committed to supporting small and medium-sized enterprises (SMEs) owned by women. The B-loan includes a $6.5 million loan from responsibility and a $5 million loan from Deutsche Bank.
Launched in April during the Summit of the Americas in Cartagena, Colombia, weB is a joint effort between the IDB’s Structured and Corporate Finance Department’s (SCF) beyondBanking Program and the Multilateral Investment Fund’s (FOMIN) Line of Activity for Promoting Small Enterprise Financing (LAPE). weB resulted from research and on-the-ground experience demonstrating that women-owned SMEs make up a high-growth yet underserved segment of Latin American and the Caribbean economic activity.
“Banco Pichincha is proud to be the first to officially inaugurate the weB initiative. It values the combination of financing and technical assistance provided and understands firsthand the contribution of women-owned SMEs to our loan portfolio as well as to local economic growth and job creation,” said Fernando Pozo, Banco Pichincha’s General Manager.
“Women entrepreneurs have been traditionally excluded from the formal banking system. Efforts like those being made at Banco Pichincha to expand lending for women-owned businesses will address unmet market demand and demonstrate the potential of women clients to stimulate growth, innovation and competition,” said Daniela Carrera-Marquis, Chief of SCF's Financial Markets Division. “We value partnerships with institutions like Pichincha that have a demonstrated commitment to broadening their client base.”
About the IDB’s Structured and Corporate Finance Department (SCF)
SCF is responsible for the IDB’s non-sovereign operations to mobilize private capital into high-impact projects across key economic sectors. SCF’s Financial Markets Division supports financial intermediaries through loans, guarantees, technical assistance and knowledge in order to strengthen trade, economic development, job creation and sustainable environmental, social and corporate governance principles. The IDB’s program beyondBanking, as part of SCF’s financial markets strategy, promotes the adoption of sustainable social, environmental and governance practices by financial intermediaries. It executes this strategy through financial products, such as loans and guarantees, technical assistance and knowledge creation.
About the IDB’s Multilateral Investment Fund (FOMIN)
FOMIN supports private sector-led development benefitting the poor and low-income populations- their businesses, their farms, and their households. FOMIN actively works to identify and spread knowledge of innovative lending models that work well for creditworthy firms currently excluded from access to credit, including those owned by women. Through its Line of Activity for Promoting Small Enterprise Financing, FOMIN will provide grants to transfer knowledge of effective lending models aimed at growing women’s businesses to and beyond the SME level.
About Banco Pichincha
The bank was founded in 1906 and has established itself as the leading bank in Ecuador. Banco Pichincha is a full-service bank that provides banking services to corporations, micro, small and medium-sized enterprises, and the retail segment. The bank is keen on further diversifying its credit portfolio by providing housing financing to lower income clientele as well as credit to women entrepreneurs, a segment of the market that is currently underserved.