The syndicated loan consists of an A loan for the equivalent of $10 million from the IDB’s own resources and a B loan for the equivalent of $26 million provided by a syndicate of private investors through the sale of participations.
Acting as lead arranger, the IDB helped Mibanco leverage additional resources to complete the overall transaction, including $17.5 million from Dexia-Microcredit Fund, managed by Blue Orchard S.A., $6.5 million from Oikocredit, and $2 million from the Calvert Foundation.
The IDB also contributed to mobilize an additional loan for the equivalent to $9 million, also denominated in nuevos soles, from Société de Promotion et de Participation pour la Coopération Economique S.A. (PROPARCO), to complete an unprecedented financing package of $45 million, the first of its kind in Peru.
This transaction constitutes a milestone for both Mibanco and the IDB. This is the IDB’s first local currency syndicated B Loan, and the first time that the IDB has engaged with Blue Orchard, Oikocredit and the Calvert Foundation as B lenders for an operation.
As a result of these efforts, Mibanco gained access to medium-term local currency financing to fund an ambitious new credit program targeted at women entrepreneurs, Crecer Mi Negocio (Spanish for Grow My Business) which will finance medium-term loans ranging from a few hundred dollars up to $3,000 for the purchase of new fixed assets or financing of improvements in existing businesses.
“The program launched by Mibanco is a unique initiative, not only for its massive scale but also because it goes a step beyond providing access to finance for low-income people by offering business training specially designed so that women who own microenterprise and small businesses can succeed in their ventures,” said project team leader Susan Olsen of the IDB’s Opportunities for the Majority initiative.
Mibanco’s CFO, Ramiro Postigo Castro, underscored the significance of this project for his institution: “We are sure that this transaction, the first local currency-denominated syndicated loan approved by a multilateral institution for Peru, will contribute to strengthen and promote entrepreneurship among women in our country and have a positive impact on the local economy. Mibanco is proud to be part of this initiative, which reaffirms the organization’s commitment to social and economic development by expanding credit to underserved markets in our country”.
With a $3 million grant from the IDB’s Multilateral Investment Fund, Mibanco is carrying out another program to provide training to 100,000 women entrepreneurs in Peru. This program is also supported by Australia through its development agency AusAID, which contributed with $1,6 million to the initiative, and by the Thunderbird School of Global Management.
Mibanco is Peru’s leading microfinance institution, with more than 500,000 clients and 150 branches throughout the country.
The IDB is the leading source of multilateral financing for sustainable economic, social and institutional development in Latin America and the Caribbean. Its A/B loans, typically used to finance private sector operations, offer B Loan investors the advantage of being covered by the IDB’s preferred creditor status.