IFC and BBVA Microfinance Foundation Join Forces to Expand Access to Finance for Entrepreneurs in Latin America
Washington, D.C., a member of the World Bank Group, and BBVA Microfinance Foundation have signed an agreement to participate jointly in equity investments in microfinance institutions throughout Latin America. The investments will help local microfinance institutions strengthen their capital base and adopt best practices, enabling them to grow and diversify their product offerings.
In Latin America, microenterprises account for 54 percent of total employment, but only about 15 percent of them have access to formal sources of finance. Through this initiative, IFC and BBVA Microfinance Foundation will selectively invest in emerging microfinance institutions that focus on increasing access to finance for people at the bottom of the economic pyramid.
“This joint initiative is important for developing the microfinance sector in Latin America. Making formal sources of financing more accessible to people who have not had this opportunity before will enable them to establish sustainable businesses that can help improve their quality of life,” said Manuel Méndez del Río, CEO of BBVA Microfinance Foundation.
Lars Thunell, IFC’s Executive Vice President and CEO, said, “Our partnership with BBVA Microfinance Foundation reflects IFC’s microfinance strategy for Latin America. It will allow us to promote access to finance to entrepreneurs in underserved areas.”
James Scriven, IFC Director for Global Financial Markets for Latin America and Caribbean and Sub-Saharan Africa, said, “We will combine the foundation’s deep understanding of the region’s retail banking and its focus on implementing a first-rate technological platform with our reach and leadership in the microfinance sector. This will offer investee companies an extensive range of tailored financial products, guidance on best practice in areas such as governance, and access to advanced technologies"
In Latin America and the Caribbean, IFC is working to expand access to high-quality financial services for underserved people, maximizing development impact and improving institutional efficiency. IFC has supported the creation or development of 24 microfinance institutions, with a cumulative investment of $213 million. In 2006, 17 microfinance clients surveyed in the region disbursed 5.9 million loans totaling $4.9 billion.
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