The International Finance Corporation (IFC), the investment arm of the World Bank, has extended a loan of USD 15 million to Brazil’s Tribanco to support microentrepreneurs [1,2,3]. The loan has a five-year tenor, and comes after a USD 10 million loan in 2004 [1]. Tribanco’s Board President Juscelino Martins points out that ” it provides a longer tenor than is available normally in Brazil, and further diversifies the bank’s funding sources” [1]. The main beneficiaries of Tribanco’s loans will be “small retail outlets that provide basic goods and services to Brazil’s low-income population in small cities and remote rural areas” [1]. In addition to financing, the IFC will provide training to Tribanco’s staff including “financial literacy modules” in the form of “booklets and e-learning”.
Tribanco was founded in 1990 [4]. It is a fully licensed bank that provides financial and banking services mostly to small businesses in Brazil. In fact, 56 percent of its loan portfolio lies with small retailers, while 21 percent is with suppliers, and 23 percent is for consumer lending [4]. Tribanco is owned by Grupo Martins, “the largest private Brazilian wholesaler specializing in foods, pharmaceuticals, construction materials, white goods and electronics” [4,5]. Therefore, all of Tribanco’s clients are generally customers or suppliers of Grupo Martins [4]. Tribanco has over USD 670 million in total assets, and a loan portfolio worth over USD 440 million [1]. Tribanco does not report to the MIX Market, the microfinance information clearinghouse [6].
The IFC was founded by the World Bank in 1956 [2]. It uses loan and debt securities, equity investments, and garantees as instruments of poverty alleviation [2]. In Brazil, the IFC is focused on providing credit to “low-income individuals, microenterprises, and small businesses,” as well as “[strengthening] infrastructure and public services” [1]. It has committed loans worth USD 2.2 billion in Brazil as of June 2009 [1].
By Christopher Maggio, Research Assistant
Bibliography:
[1] IFC press release entitled ‘IFC Expands Access to Finance for Brazilian Microenterpreneurs with Support to Tribanco’: http://www.ifc.org/ifcext/lac.nsf/Content/SelectedPR?OpenDocument&UNID=80B6A355F60FD1B385257649004FCD6C
[2] IFC: http://www.ifc.org/
[3] Tribanco (in Portuguese): http://www.tribanco.com.br/
[4] Tribanco on IFC.org: http://www.ifc.org/ifcext/spiwebsite1.nsf/1ca07340e47a35cd85256efb00700cee/B1E3C78AD567722C85256E6100789733
[5] Grupo Martins (in Portuguese): http://www.martins.com.br/site/content/institucional/grupo/default.asp?secao_id=13
[6] The MIX Market: http://www.mixmarket.org/
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