MICROCAPITAL BRIEF: IDB Loans $10m to Factotal for SME Leasing, Factoring, Vendor Finance in Chile, Peru

IDB Invest, the private sector arm of the Inter-American Development Bank (IDB) Group, recently disbursed a four-year loan of USD 10 million to Factotal SA, a Chile-based provider of leasing, factoring and vendor-finance services for small and medium-sized enterprises (SMEs). The deal, which is the fourth between the parties, is intended to boost SMEs’ access to finance. It also includes IDB Invest advising Factotal on modifying its corporate governance, environmental policy and asset-laundering prevention practices to align “with the best international practices in the field.”

Established in 1993 and headquartered in the city of Santiago, Factotal has 27 branches in Chile and two in Peru. As of December 2017, the firm reported total assets of CLP 101 billion (USD 164 million), an outstanding factoring account of CLR 53 billion (USD 86 million) and outstanding leases of CLP 34 billion (USD 56 million). The majority of Factotal clients are in the construction, service and retail sectors.

Headquartered in the city of Washington, IDB Group serves Latin America and the Caribbean through four members: IDB, IDB Invest, the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund (MIF).

IDB is a development finance institution that was founded in 1959 and has 48 member countries, including 26 countries located in Latin America and the Caribbean. It works with governments, companies and NGOs to finance sectors such as financial services, health, education, renewable energy, transportation and telecommunications for the promotion of “social inclusion and inequality, productivity and innovation, and economic integration.” It also provides technical assistance and research in these areas. During 2017, IDB disbursed loans totaling USD 10 billion and had USD 89 billion in loans outstanding.

IDB Invest is a US-based financial institution specializing in debt and equity financing for small and medium-sized enterprises (SMEs) and other private-sector projects in Latin America and the Caribbean. The institution provides consulting services and “finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region.” During 2017, it executed 234 loans, guarantees and other contracts valued at a total of USD 3.2 billion. As of 2018, its portfolio is valued at USD 11.2 billion and spans 23 countries.

IIC provides financial and advisory services to SMEs, financial service providers, corporations and government-backed enterprises. As of March 2018, IIC reported quarterly loan disbursements of USD 101 million and outstanding loans of USD 1 billion.

MIF invests in microfinance funds, venture capital funds and projects that support SMEs. During 2017, MIF launched 36 projects costing a total of USD 24 million.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

IDB press release
https://www.iadb.org/en/news/idb-invest-supports-financing-small-and-medium-sized-companies-chile-through-factotal

Factotal S.A background
https://www.factotal.cl/quienes_somos

Factotal S.A financials
http://www.svs.cl/institucional/mercados/entidad.php?mercado=V&rut=96660790&grupo=0&tipoentidad=RVEMI&row=AAAwy2ACTAAABywAAY&vig=VI&control=svs&pestania=3

MicroCapital article; May 31, 2018; IDB Buys $3m Equity Stake in Digital Lender, Payments Provider Moni of Argentina
https://www.microcapital.org/microcapital-brief-idb-buys-3m-equity-stake-in-digital-lender-payments-provider-moni-of-argentina/

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