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Inter-American Investment Corporation posts record financial results for fifth consecutive year

Miami, U.S.A.--On April 8, 2008, the Inter-American Investment Corporation (IIC) reported on its financial results during the twenty-third meeting of its Board of Governors. The report was ratified by the Governors of the IIC’s member countries. According to the IIC’s annual report, its total assets have tripled over the past five years, to US$1.24 billion at year-end 2007.

Interest income for 2007 was US$131.8 million; capital gains, dividends, and other income totaled US$56 million for the year. Earning assets (net of provisions) grew steadily, from US$647 million in 2006 to US$800 million as of December 2007. Development-related assets account for 70.1% of the IIC’s total assets.

Sixty-two projects were approved in fifteen countries for a total of US$470 million; US$273 million in funding was mobilized from other sources, bringing the amount of financing made available to enterprises in the region to US$743 million.

The thirty-three projects approved through financial institutions totaled US$370.3 million and account for 35.6% of the IIC’s total portfolio. The IIC’s strategy for working with financial institutions met four key goals: decreasing the average amount of individual operations and increasing the number of end beneficiaries; achieving greater product flexibility; diversifying its portfolio; and furthering the institutional development of financial intermediaries, principally the smaller ones. Over the past five years, the Corporation has developed key partnerships with more than eighty financial intermediaries in the region.

To fulfill its developmental mandate, the IIC has strengthened its ability to respond to its target market’s needs. One example is the creation of the first program for specialized financial institutions in Mexico (IFEM), with US$30 million for helping participating institutions increase their SME finance portfolios. Another is the consolidation of a streamlined financing tool called the Small Business Revolving Line (SBRL). Eight operations in smaller economies were approved under this line. To broaden this tool, in 2007 the IIC signed agreements with local agents in Bolivia (Fundación Bolivia Exporta) and the English-speaking Caribbean (DFLSA and ICWI). 

The IIC’s increasing financial diversification can be seen in the local-currency financing it has provided. In 2007, financing was approved for eleven operations in Argentine pesos, Colombian pesos, Mexican pesos, Brazilian reais, and Peruvian nuevos soles. These operations totaled the equivalent of US$141 million—13% of total net approvals.

Another key IIC initiative during the year was the launch of phase two of the innovative small and medium-size enterprise financing program called Financiación Innovadora de PYME (FINPYME). The program provides for the diagnostic review of such companies. With funds from the Republic of Korea, the IIC signed agreements with seven universities in Central America, Dominican Republic, and Panama that were trained in the use of the FINPYME tool and are now FINPYME agents. Seventy-three companies have completed the diagnostic phase, and eight are ready to receive financing from the Corporation or other financial institutions supporting the initiative.

The IIC also gave its first seminar on family business governance, attended by thirty representatives from ten client companies.

The Inter-American Investment Corporation, a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group, provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. The IIC has approved some US$3.07 billion in funding since it began operations. For more information on the IIC’s activities, please visit www.iic.int.