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IDB, Fundacion BBVA para las Microfinanzas to promote expansion of microfinance services in Latin America

SAN SALVADOR – The Inter-American Development Bank and Fundacion BBVA para las Microfinanzas (BBVA Foundation for Microfinance) today signed a memorandum of understanding to work together on activities to expand access to microfinance services in Latin America.

IDB President Luis Alberto Moreno and the president of Fundacion BBVA para las Microfinanzas, Manuel Antonio Mendez del Rio, signed the document in a ceremony held during the Tenth Microenterprise Forum.

“The decision by a major international bank such as BBVA to establish a foundation devoted to microfinance is another sign of the transformation this industry is undergoing to reach millions of Latin Americans who still lack access to formal financial services,” said Moreno. “And the fact that it has done so through a nonprofit organization underscores its commitment to the social principles that have always inspired leaders in this field.”

Mendez del Rio added: “For Fundacion BBVA para las Microfinanzas, this agreement with the IDB is of great importance. We will be working together to promote economic and social development for the less fortunate, joining forces with the leader in microfinance development in Latin America and bringing our resources and more than 150 years of banking experience to the challenge of expanding financial services for the poor in the region.”

Under the agreement, the Foundation and the IDB, through its Multilateral Investment Fund (MIF), may collaborate on projects to promote the microfinance industry as a whole, as well as to support individual microfinance institutions with financing or technical assistance.

The IDB/MIF and the Foundation may also finance the development of open technological platforms to help microfinance institutions improve their loan portfolio risk management. In terms of corporate good governance, they will promote the adoption of best practices by institutions in the industry.

Additionally, the IDB/MIF and the Foundation could support training for the staff of microfinance institutions, working with universities and business schools to develop courses and scholarship programs.

The IDB/MIF and the Foundation also hope to cooperate with the region’s banking regulators to promote improvements in the regulatory framework for microfinance.

The IDB has long been the leading source of financing for microfinance development in Latin America and in the Caribbean. Over the past three decades it has invested more than $1 billion in more than 500 microenterprise-related projects in the region. Through the MIF it has supported the region’s leading microfinance networks.

Fundacion BBVA para las Microfinanzas was established earlier this year by BBVA, a major international financial group with headquarters in Spain and banking operations in 10 countries in Latin America. The foundation has a 200 million-euro (approximately US$280 million) endowment to create a global microfinance network.

The first Latin American institutions to join the Foundation’s network were Corporacion Mundial de la Mujer-Colombia, Corporacion Mundial de la Mujer- Medellin, Caja Sur and Caja Nor-Peru.


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