The International Finance Corporation (IFC), a member of the World Bank Group, recently agreed to lend Banco Agromercantil (BAM), a subsidiary of Colombia-based Grupo Bancolombia, USD 20 million, thus mobilizing an equal amount from the Eco-Business Fund, which is domiciled in Luxembourg. BAM is to use the liquidity to support 1,000 microenterprises as well as small and medium-sized enterprises (SMEs) in the country, as Guatemala continues to adjust to the COVID-19 pandemic.
Bolaños Coloma, the CEO of BAM, said, “IFC’s timely support will help us strengthen our position in the SME segment and allow us to expand financing to local companies, thus creating jobs. We are keen to work toward a defined strategy that will help preserve the market’s ability to foster economic recovery in Guatemala.”
BAM was created in 2000 by the merger of Banco Agricola Mercantil and Banco del Agro, two Guatemalan banking institutions. Grupo Bancolombia purchased a 60-percent stake in BAM in 2015. BAM provides banking services in Guatemala at 165 agencies in 22 departments in Guatemala as well as via a digital banking system called BAMnet. As of year-end 2018, BAM had total assets of GTQ 26.8 billion (USD 3.5 billion).
The Eco-Business Fund offers “green finance to promote sustainable business practices in agriculture, aquaculture, forestry and tourism.” As of June 2020, the fund has investments in 20 firms in seven countries. Its sub-funds focus on: (1) Africa; and (2) Latin America and the Caribbean. As of June 2020, the Eco-Business Fund has assets under management totaling USD 386 million.
IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2020, it reported total assets of USD 96 billion.
The World Bank Group is a multilateral organization whose two overarching goals are to promote shared prosperity and end extreme poverty by 2030. With 189 member nations as of 2020, the group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the year ending June 2019, the World Bank Group disbursed a total of USD 62.3 billion in loans, grants, equity investments, and guarantees to partner countries and private businesses.
By Nathan Kiplagat, Research Associate
Sources and Additional Resources
IFC press release
https://ifcextapps.ifc.org/ifcext/pressroom/ifcpressroom.nsf/vwAllDocumentsByUNID_NL/686148A5FC6D3825852585FC006CE775?opendocument=
Banco Agromercantil de Guatemala homepage
https://www.bam.com.gt
Banco Agromercantil de Guatemala financial reports
https://www.bam.com.gt/informacion-relevante/financial-information
Grupo Bancolombia homepage
https://www.grupobancolombia.com
Eco-Business Fund homepage
http://www.ecobusiness.fund
IFC homepage
https://www.ifc.org
World Bank homepage
https://www.worldbank.org/
World Bank 2019 financials
https://www.worldbank.org/en/about/annual-report/fiscal-year-data
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