MICROCAPITAL BRIEF: Peruvian Microfinance Institution (MFI) Mibanco Receives $45m Syndicated Loan from Inter-American Development Bank (IDB), BlueOrchard, Oikocredit, the Calvert Foundation and Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO)

Peruvian microfinance institution (MFI), Mibanco, has received a loan package of USD 45 million, arranged by Inter-American Development Bank (IDB), allowing it to create a new credit program, Crecer Mi Negocio, which targets women entrepreneurs. The program will help finance medium-term loans ranging from a few hundred dollars up to USD 3,000 for the purchase of new fixed assets or otherwise financing existing businesses. The precise range of maturities indicated ‘medium-term’ has not been released to date.

Acting as lead arranger, IDB integrated funds from the Dexia-Microcredit Fund, which is managed by BlueOrchard of Switzerland; the development financial institution Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO), which is jointly held by the Agence Francaise de Developpement (AFD) and private shareholders, as well as microfinance investors Oikocredit and the Calvert Foundation.

The syndicated loan consists of an A loan for the equivalent of USD 10 million from the IDB’s own resources and a B loan for the equivalent of USD 26 million provided by a syndicate of private investors. The B loan consists of USD 17.5 million from BlueOrchard, USD 6.5 million from Oikocredit and USD 2 million from the Calvert Foundation. Although the loan amounts were announced in US dollars, both A and B loans are denominated in Peruvian nuevos soles.

An additional loan for the equivalent of USD 9 million, also in denominated in nuevos soles, from the French development finance institution, Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO), brings the financing package to the equivalent of USD 45 million.

Mibanco’s Chief Financial Officer (CFO), Ramiro Postigo Castro stated, “We are sure that this transaction, the first local currency-denominated syndicated loan approved by a multilateral institution for Peru, will strengthen and promote entrepreneurship among women in our country and have a positive impact on the local economy.”

About Mibanco:

Mibanco (Banco de la Microempresa), created in 1998, is a private Peruvian bank that aims to assist the development of micro- and small enterprises (MSEs). Its strategy is to target markets where demand for micro-credit is highest and supply weakest: it focuses on the Lima and Callao area where an estimated 70 percent of unsatisfied microcredit demand can be found. Mibanco offers both lending and savings products, and it employs both individual and solidarity group lending methodologies. Loans are offered for working capital and fixed investment needs. Loan size ranges from the equivalent of USD 100 to USD 100,000, with loan terms of 3 to 60 months, with interest rates from 25 percent up to 50 percent per year.

About Inter-American Development Bank (IDB):

The Inter-American Development Bank (IDB) was established in 1959 and provides multilateral financing in Latin America and the Caribbean. The bank works with governments, companies and non-governmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health and education, among other sectors. It also provides technical assistance and research in these areas. Its Board of Executives are elected by 48 member countries, 26 of which are from Latin America and the Caribbean.

About BlueOrchard:

BlueOrchard is a Swiss commercial microfinance intermediary that provides loans to microfinance institutions through its subsidiary BlueOrchard Finance S.A. and invests in the equity of microfinance institutions and microfinance network funds through its subsidiary BlueOrchard Investments S.A. BlueOrcahrd had approximately USD 980 million under management as of June 2009.

About Oikocredit:

Oikocredit is a Dutch cooperative investment fund comprised of church groups, social support groups and individual investors. Established in 1975, it works in 70 countries worldwide, investing mainly in microfinance institutions (MFIs), as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of year-end 2009 it had EUR 537 million (USD 715 million) in total assets with 790 active investments, of which 543 investments were in MFIs.
About Calvert Foundation:

The Calvert Foundation provides loans to organizations that provide affordable housing, microfinance, small business loans, and community facilities. The fund is offered by the Calvert Social Investment Foundation, a private US foundation founded in 1995 with the support of the Ford, MacArthur and Mott Foundations. Investment in the Fund comes in the form of donations and notes held by individuals and organizations, including Washington Mutual Bank, Ameritas Life Insurance Corp. and Gray Ghost Microfinance Fund, LLC.

About Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO):

Established in 1977, Promotion et Participation pour La Cooperation Economique (PROPARCO) ?the Investment and Promotions Company for Economic Cooperation) is a development finance institution based in Paris, France, that is jointly held by the Agence Francaise de Developpement (AFD), a bi-lateral development finance institution working on the behalf of the French government, and private shareholders. PROPARCO’s mission is to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the Millennium Development Goals (MDGs). In 2009, PROPARCO disbursed EUR 1.1 billion (USD 1.4 billion) for 80 projects in thirty countries.

By Matthew Fox, Research Assistant

Sources and Additional Resources

Inter-American Development Bank (IDB) Press Release, 6 August 2010: http://www.iadb.org/news-releases/2010-08/english/perus-mibanco-receives-45-million-to-boost-credit-for-women-microentrepreneurs–7613.html

MicroCapital Brief: Inter-American Development Bank (IDB) to Provide $10m Loan to Mibanco of Peru to Help Launch Microfinance Product: https://www.microcapital.org/microcapital-brief-inter-american-development-bank-idb-to-provide-10m-loan-to-mibanco-of-peru-to-help-launch-microfinance-product/

MicroCapital Universe: Mibanco: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mibanco

MicroCapital Universe: Inter-American Development Bank (IDB): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+(IDB)

MicroCapital Universe: BlueOrchard: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BlueOrchard

MicroCapital Universe: Oikocredit: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Oikocredit

MicroCapital Universe: Calvert Foundation: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Calvert+Foundation

MicroCapital Univese: Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PROPARCO

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