IFC Continues Promoting Microfinance in Mexico by Investing in New Microfinance Bank, Banco Amigo
IFC, the private sector arm of the World Bank Group, today signed an agreement with Banco Amigo S.A., a newly established microfinance bank in Monterrey, Mexico. IFC will provide financing to help the bank expand its products and services to low-income entrepreneurs and women-owned small businesses.
The 77 million Mexican peso equity investment ($7.1 million equivalent) represents a stake of up to 18 percent in Banco Amigo. IFC will also provide guidance on key areas, such as credit policies, credit scoring, and risk management.
The IFC financing to Banco Amigo aligns with one of IFC’s strategic priorities in Mexico and Latin America: to develop a sound and financially sustainable microfinance sector, expanding access to finance for smaller businesses. IFC currently supports 23 microfinance companies in eight countries across the region: Bolivia, Brazil, the Dominican Republic, El Salvador, Haiti, Nicaragua, Mexico, and Peru. As a whole, the companies provide credit and deposit services for some 1.5 million entrepreneurs.
Gerardo José de la Garza Santos, Banco Amigo’s Chairman of the Board of Directors, said, “We are excited about developing this partnership, which will combine IFC’s strong international microfinance experience with our local expertise.” He also noted that the bank will place an emphasis on providing credit to low-income women entrepreneurs, as part of its mission to promote microfinance for smaller businesses.
“We are very pleased to support Banco Amigo, a new player in Mexico’s microfinance sector. The bank shares IFC’s vision of promoting access to finance for low-income entrepreneurs,” said Atul Mehta, IFC Director for Latin America and the Caribbean. “We are committed to supporting microfinance in the country because it is an effective way to create economic opportunities and reduce inequality.”
IFC’s strategy for Mexico focuses on enhancing the competitiveness of the private sector, deepening the financial sector by introducing specialized products and markets, supporting infrastructure development and investments in areas newly opened to private sector participation, and promoting sustainable environmental and social development and good corporate governance.
Since 1956 when Mexico became a member of the IFC, the Corporation has invested $5.6 billion in Mexico, including $2.2 billion in syndications, in sectors ranging from infrastructure and manufacturing to agribusiness and the financial sector. IFC committed $260 million in fiscal 2006 in new financing in the country, and it held a total portfolio of $1.1 billion, including syndications, as of July 31, 2006.
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