MICROCAPITAL BRIEF: IFC Issues $9.9m in Local-currency Bonds to Invest in Coopenae for Housing Finance in Costa Rica

The International Finance Corporation (IFC), a unit of the World Bank Group, recently issued CRC 5.7 billion (USD 9.9 million) in local-currency bonds to undisclosed buyers in Costa Rica to raise funds to loan to Cooperativa Nacional de Educatores (Coopenae), a Costa Rican savings and credit cooperative. Coopenae plans to use the proceeds to expand its provision of housing finance products to low- and middle-income families. Adrian Alvarez, the CEO of Coopenae, reportedly said, “[B]uying a house or apartment is a dream for many families. By partnering with IFC, we will be able to provide more of our member families with responsible financial solutions to become first-time homeowners.” The securities IFC issued, which are called “Irazu II bonds,” have terms of five years and an annual yield of 8.44 percent.

Coopenae was established in 1966 to support teachers and transformed into a national, regulated finance company in 1983. Coopenae now offers credit, savings and insurance products as well as funds social welfare projects, including initiatives related to health, education and sports. As of June 2018, it reported total assets of CRC 749 billion (USD 1.3 billion), outstanding loans of CRC 518 billion (USD 897 million) and customer deposits of CRC 429 billion (USD 742 million). The cooperative has 110,000 members.

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. IFC has 184 member countries, and it reports total assets of USD 93 billion as of June 2017. During the year ending that month, it disbursed a total of USD 10 billion and earned return on assets of 1.6 percent and return on equity of of 5.9 percent. As of 2018, IFC has a portfolio of 14 projects worth USD 372 million in Costa Rica.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2018, it has 189 member nations. The group encompasses (1) the International Bank for Reconstruction and Development and the International Development Association, 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 2017, the World Bank Group disbursed a total of USD 44 billion.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/5CF49B5EB0B7236B852582E100577A5A

Coopenae background
https://www.coopenae.fi.cr/nuestra-historia/

Coopenaeu financials
https://www.coopenae.fi.cr/wp-content/uploads/2018/07/Balance06-18.pdf

IFC activity in Costa Rica
https://disclosures.ifc.org/#/enterpriseSearchResultsHome/costa%20rica

MicroCapital Brief; July 20, 2018; IFC, Azerbaijan to Expand Digital Financial Services in Nakhchivan Autonomous Republic with Funding from Switzerland’s SECO
https://www.microcapital.org/microcapital-brief-ifc-azerbaijan-to-expand-digital-financial-services-in-nakhchivan-autonomous-republic-with-funding-from-switzerlands-seco/

MicroCapital Brief; December 7, 2012; Absolute Portfolio Management Loans $22m to Microfinance Institutions (MFIs) Worldwide, Including $2m to Costa Rican MFI National Cooperative of Educators (Coopenae), $1m Renewed to FINCA Ecuador
https://www.microcapital.org/microcapital-brief-absolute-portfolio-management-loans-22m-to-microfinance-institutions-mfis-worldwide-including-2m-to-costa-rican-mfi-national-cooperative-of-educators-coopenae-1m-renewed-t/

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