MICROCAPITAL BRIEF: Banco Sudameris, OPIC, Citi Cooperate on $125m Loan Package for SMEs in Paraguay, Focusing on Women Entrepreneurs

As part of its 2X Women’s Initiative, the US government’s Overseas Private Investment Corporation (OPIC) has partnered with Colombia-based Banco Sudameris and US-based Citi to assemble USD 125 million for Banco Sudameris to lend to small and medium-sized enterprises (SMEs) in Paraguay. This includes USD 23.44 million from the bank’s internal accounts, USD 93.75 million borrowed from OPIC for nine years and USD 7.81 million borrowed from Citi for three years. Citi is also supporting the loan package with an interest-rate swap limiting the interest rates Banco Sudameris will pay over the full term of the package.

An undisclosed percentage of the investment will be focused on “women-owned and women-led businesses” in line with OPIC’s plan to invest USD 350 million to mobilize USD 1 billion to help female entrepreneurs by providing them with “long-term” business financing.

Banco Sudameris was founded in 1910 and is based in Colombia. It also operates in Paraguay and Peru. Its unit in Paraguay reports total assets of COP 3 trillion (USD 1.2 billion), customer deposits of COP 2.4 trillion (USD 731 million) and a gross loan portfolio of COP 2.1 trillion (USD 655 million). The parent company reports total assets of USD 9.2 billion.

Established in 1971, OPIC is an agency of the US government whose function is to promote economic partnerships and invest in areas deemed important to US interests. OPIC provides loans, grants, political-risk insurance and advisory services to US-based private equity funds; local financial institutions; and projects in the healthcare, energy, technology and education sectors. During 2017, the organization originated USD 3.8 billion in new commitments, mobilizing total capital of USD 6.8 billion and closing the year with 90 active projects.

Headquartered in the city of New York, Citi offers consumer and commercial banking, brokerage, asset management, and institutional securities and transactions services. Its philanthropic activities, including a financial inclusion initiative, are carried out by the Citi Foundation. Citi serves approximately 200 million customers in 160 countries. As of 2017, it reports total assets of USD 1.8 trillion.

By Michelle Fleming, Research Associate

Sources and Additional Resources

Direct contact with OPIC

OPIC press release
https://www.opic.gov/press-releases/2018/opic-citi-and-banco-sudameris-supporting-100-million-women-owned-businesses-paraguay

Background information on transaction
https://www.opic.gov/press-releases/2018/opic-board-approves-nearly-900-million-development-projects-africa-asia-and-latin-america

Banco Sudameris Paraguay homepage
http://www.sudameris.com.py/index.php

Banco Sudameris financial information
https://www.gnbsudameris.com.co/content/files/docs/gnb_sudameris_3Q17_results_cop_30nov17.pdf

Citigroup homepage
https://www.citigroup.com/citi/

OPIC homepage
https://www.opic.gov

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