The Inter-American Development Bank (IDB), a US-based development finance institution, has arranged a USD 3.6 million syndicated loan to the “Fund for Small Rural Producers in Latin America” or “Fondo para los Pequeños Productores Rurales en América Latina” (FOPEPRO), to provide access to finance for associations of small-scale farmers and other producers in nine Latin American countries. IDB’s Opportunity for the Majority Initiative funded USD 2 million of the loan to FOPEPRO while Deutsche Bank Trust Company Americas, US-based Calvert Foundation and US-based Monarch Community Funds provided a total of USD 1.6 million. The breakdown of this amount among the three lenders was undisclosed.
Headquartered in El Salvador, FOPEPRO is a private, locally managed fund that invests in the smallholder agricultural sector across Latin America. The Fund is seeking to raise a total USD 20.5 million to finance credit lines and other loans to farmer cooperatives and other associations in Bolivia, Colombia, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Peru and Paraguay. Referring to the lack of confidence among traditional financial institutions in managing agricultural lending risks, Ms Susan Olsen, IDB Project Team Leader, commented, “FOPEPRO’s fund management model cracks the nut of providing access to finance for small-scale farmers”.
By Carol Kim, Research Associate
About the Inter-American Development Bank (IDB): The Inter-American Development Bank (IDB) is a US-based multilateral finance institution established in 1959 that operates 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 Board of Executives is elected by 48 member countries, 26 of which are located in Latin America and the Caribbean. IDB reported total assets of USD 84 billion as of December 31, 2009.
About Calvert Foundation: Calvert Foundation provides loans to organizations that provide affordable housing, microfinance, small business loans, and community facilities. The fund is offered by the Calvert Social Investment Foundation, a private US foundation founded in 1995 with the support of the Ford, MacArthur and Mott Foundations. Investment in the Fund comes in the form of donations and notes held by individuals and organizations, including Washington Mutual Bank, Ameritas Life Insurance Corp. and Gray Ghost Microfinance Fund, LLC.
Sources and Additional Resources:
Inter-American Development Bank News Release: “IDB Closes $3.5 million syndicated loan to provide access to finance for smallholder farmers”, July 2011, http://www.iadb.org/en/news/news-releases/2011-07-05/latin-america-agricultural lending,9440.html?WT.mc_id=NewsEmail_Long_9440&wtSrc=Email&wtType=Long&wtArticleID=9440
MicroCapital.org: “MICROCAPITAL BRIEF: IDB Provides Partial Credit Guarantee to Patrimonio Hoy Microfinance Program of Mexico’s CEMEX to Boost Lending in Mexico, Colombia, Costa Rica, Nicaragua, Dominican Republic”, July 4, 2011, https://www.microcapital.org/microcapital-brief-idb-provides-partial-credit-guarantee-to-patrimonio-hoy-microfinance-program-of-mexico%E2%80%99s-cemex-to-boost-lending-in-mexico-colombia-costa-rica-nicaragua-dominican-republ/
MicroCapital.org: “MICROCAPITAL BRIEF: Inter-American Development Bank (IDB) President Urges Commercial Banks in Peru to Focus on Microfinance”, June 23, 2011, https://www.microcapital.org/microcapital-brief-inter-american-development-bank-idb-president-urges-commercial-banks-in-peru-to-focus-on-microfinance/
MicroCapital’s Universe Profile: Inter-American Development Bank (IDB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank +%28IDB%29
MicroCapital’s Universe Profile: Calvert Foundation https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Calvert+Social+Investment+Foundation
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