GUATEMALA CITY – Authorities from the Inter-American Development Bank (IDB), Hivos-Triodos Fund Foundation (HTF) of the Netherlands and Développement international Desjardins (DID) of Canada signed a memorandum of understanding today for a joint investment of approximately $1.1 million in Financiera Nicaragüense de Desarrollo S. A. (FINDESA).
Signing the document were IDB President Enrique V. Iglesias, representing the Multilateral Investment Fund (MIF); HTF senior investment officer Eric Peter Geurts; DID senior manager for investment, finance and corporate administration Pierre Edmond; and FINDESA President Gabriel Solórzano.
The ceremony was held during the Sixth Inter-American Forum on Microenterprise, organized by the IDB and the Guatemalan Ministry of the Economy in Guatemala City on September 4 to 5.
The MIF, HTF and DID will each purchase 10 percent of FINDESA’s corporate assets. The MIF investment may total up to $500,000. The investments will strengthen FINDESA so that it can broaden the scope of its activities by developing new financial services for micro and small enterprise and expanding into other areas of Nicaragua.
Among the new services FINDESA hopes to offer are deposit facilities, savings accounts, “smart” cards, and distribution of family remittances sent by Nicaraguans living abroad.
The MIF, HTF and DID will play an active part in the corporate governance of FINDESA. DID will provide technical assistance to train FINDESA staff in management of the new services. The MIF contribution also includes a $250,000 grant to FINDESA for technical cooperation.
In addition, HTF has granted FINDESA a $1 million medium-term loan. The MIF will give FINDESA access to another $1 million loan once it obtains authorization to take deposits and implements a program to provide deposit-taking services. The MIF resources will be used to grant credit to micro and small enterprises in Nicaragua.
The MIF, an independent fund administered by the IDB, supports private sector development in Latin America and the Caribbean through investments, lending and grants. Since it was founded in 1992, it has contributed to some of the most noteworthy microfinance institutions in Latin America.
The Hivos-Triodos Fund is an investment fund set up by Triodos Bank of the Netherlands, a financial institution that mobilizes European investment funding for sustainable development and social equity, and the Humanist Institute for Co-operation with Developing Countries (HIVOS).
Développement international Desjardins is a subsidiary of Mouvement Desjardins, a network of credit unions that is the leading financial group in the Canadian province of Quebec. DID specializes in technical assistance and investments for community banking in developing countries.
FINDESA is a regulated financial institution that provides credit to thousands of micro and small enterprises in Nicaragua. Among its current shareholders are local NGOs INDE and FINDE and a group of prominent Nicaraguan entrepreneurs and bankers.