The Inter-American Development Bank (IDB), a US-based finance institution that provides funding to support small and medium-sized enterprises (SMEs) and other sectors, recently issued a partial credit guarantee of UYU 51.4 million (USD 2.41 million) to Microfin, a microfinance institution (MFI) that provides support to SMEs in Uruguay. The credit guarantee lowers the credit risk taken on by Microfin and in turn allows it to access funding from Citibank, which is based in New York and has operations in 160 countries. The loans to be requested from Citibank have not been released. Microfin intends to use the additional funds to expand financial services for its existing clients and develop partnerships with SMEs within the food and consumer goods industries [1].
Founded in 2008, Microfin aims to provide credit and other financial services to SMEs. As of 2011, Microfin reports total assets of USD 11.9 million, a gross loan portfolio of USD 7.3 million, 2,113 active borrowers, return on assets (ROA) of -5.89 percent, return on equity (ROE) of -26.27 percent and no depositors.
IDB works with governments, companies and nongovernmental organizations (NGOs) to provide loans, grants, technical assistance and research to support SMEs, health, education and other sectors. As of 2011, IDB reports total assets of USD 89 billion.
By Sarah Benali, Research Associate
About Microfin
Founded in 2008, Microfin of Uruguay aims to provide credit and financial services to small and medium-sized enterprises (SMEs). As of 2011, Microfin reports total assets of USD 11.9 million, a gross loan portfolio of USD 7.3 million, 2,113 active borrowers, return on assets (ROA) of -5.89 percent, return on equity (ROE) of -26.27 percent and no depositors.
About Inter-American Development Bank
The Inter-American Development Bank (IDB) is a US-based multilateral finance institution that was established in 1959 to operate in Latin America and the Caribbean. IDB works with governments, companies and nongovernmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health, education and other sectors. IDB also provides technical assistance and research in these areas. Its 48 member countries, 26 of which are located in Latin America and the Caribbean, elect IDB’s Board of Executives. As of 2011, IDB reported total assets of USD 89 billion. The IDB is headquartered in Washington, DC, with additional offices in Japan, France and all 26 member countries in Latin America and the Caribbean.
Sources and Additional Resources
[1] Inter-American Development Bank Press Release: “Uruguay’s Microfin to expand access to financial services to microenterprises with IDB support”, September 20, 2012,
http://www.iadb.org/en/news/news-releases/2012-09-20/partial-credit-guarantee-to-uruguays-microfin,10115.html
MicroCapital Universe Profile: Inter-American Development Bank
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+%28IDB%29
MicroCapital Universe Profile: Microfin
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfin+Uruguay
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