The Inter-American Development Bank’s Multilateral Investment Fund announced today the approval of a US$4 million loan and a US$815,000 technical cooperation grant to Cordial Microfinanzas S.A. for a program to promote financial democracy in Argentina.
“Cordial will offer microfinance products and services in urban areas where middle and low- income formal and informal microentrepreneurs are well represented, so that they can develop their business through products tailored to their needs,” said IDB Team Leader Susana García Robles. “The program will also facilitate Cordial’s access to stable sources of long-term financing so that it can consolidate and grow rapidly, reaching more than 15,000 clients in two years.”
Cordial Microfinanzas S.A. is a new institution that opened its doors in Greater Buenos Aires in February 2007 and operates as a business corporation. It plans to open as many as 30 branches over the next three years with a loan portfolio exceeding US$30 million by 2010 with MIF funding.
“Cordial belongs to a major financial group in Argentina, Grupo Supervielle, that has decided to begin downscaling to serve the country’s low-income population,” added García Robles. “The project expects to improve the socioeconomic condition of Argentine microentrepreneurs and their families, who lack access to formal financing.”
MIF, an autonomous fund administered by the IDB, supports private sector development in Latin America and the Caribbean, focusing on microenterprise and small business.
The IDB loan is for a six year term at an interest rate of Libor plus 300 basis points. Repayment of principal will take place on the fifth and sixth year. For the technical cooperation grant Cordial Microfinanzas S.A. will provide US$1,320,000 counterpart funding.
Source: Inter-American Development Bank
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