MICROCAPITAL BRIEF: International Finance Corporation (IFC) Purchases Entire $42m Issuance of Bonds by Rural Microfinance Institution Bancamía of Colombia

The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently announced that it purchased the entire stake of ordinary bonds recently issued by Bancamía S.A. (Corporation), a Colombian microfinance institution (MFI). The offering is valued at COL 100 billion (USD 42 million).

Ms María Mercedes Gómez, the executive president of Bancamía, said that “this transaction will enable us to balance the cash flow of customers in the rural sector, whose crop and livestock operations have a medium- or long-term horizon, with a bond issue that gives us funds for five years to facilitate the productive development of entrepreneurs in rural areas, which is our institution’s main line of business. In addition, it is an instrument that allows us to diversify the bank’s funding”[1]. Mr Carlos Leiria Pinto, IFC’s head for the Andean region, added that “this financing demonstrates our support for expanding access to financial services for microentrepreneurs in Colombia and deepening the country’s capital markets”[1].

Bancamía benefitted from an investment of USD 10 million from IFC in 2010. According to the Microfinance Information Exchange (MIX), Bancamía reported total assets of USD 649.5 million, a gross loan portfolio of USD 528.9 million, deposits of USD 207 million, approximately 377,600 active borrowers and 637,800 depositors, return on assets of 3.55 percent and return on equity of 14.29 percent as of September 30, 2014. The current bond issue is Bancamía’s second such transaction. Bancamía was created in 2008 as a joint venture between Corporación Mundial de la Mujer de Medellín, Corporación Mundial de la Mujer Colombia and Fundacion Microfinanzas BBVA, a nonprofit organization owned by BBVA Group, a Spanish financial services conglomerate. As of September 2014, the group of eight MFIs that are affiliated with Fundación BBVA Microfinanzas reported a combined outstanding credit portfolio of USD 1.125 billion serving approximately 1.5 million customers.

IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. IFC has an investment portfolio of USD 1.5 billion in Colombia, of which USD 500 million was sourced from other financial institutions. IFC has made investments in the country’s infrastructure, healthcare, education and agriculture sectors as well as in its micro-, small and medium-sized enterprises (MSMEs).

By Alíz Crowley, Research Associate

About Bancamía, S.A.

Bancamía, a microfinance institution in Colombia, was created in 2008 as a joint venture between Corporación Mundial de la Mujer de Medellín, Corporación Mundial de la Mujer Colombia and Fundacion Microfinanzas BBVA, a microfinance institution owned by BBVA Group, a Spanish financial services conglomerate. According to the US-based nonprofit Microfinance Information Exchange (MIX), Bancamía reported total assets of USD 649.5 million, a gross loan portfolio of USD 528.9 million, deposits of USD 207 million, approximately 377,600 active borrowers and 637,800 depositors, return on assets of 3.55 percent and return on equity of 14.29 percent as of September 30, 2014.

About Fundación BBVA Microfinanzas

Fundación BBVA Microfinanzas (BBVA Microfinance Foundation) is a Spanish nonprofit organization that was created in May 2007 by BBVA, a Spanish bank that reported total assets of EUR 617 billion (USD 779 billion) as of June 30, 2014. The goal of the foundation is to boost the economic and social development of disadvantaged people through access to productive microfinance. Fundación BBVA Microfinanzas is building a network of microfinance institutions (MFIs), which consists of eight MFIs as of 2014 in: Argentina, Chile, Colombia, Dominican Republic, Panama, Peru and Puerto Rico. As of September 2014, the group of MFIs reported a total of 484 branches and an outstanding credit portfolio of USD 1.125 billion serving approximately 1.5 million customers.

About Grupo BBVA

Formed in 1999, Grupo BBVA is a multinational Spanish financial group that offers a range of financial services including personal banking, financing for small and medium-sized enterprises (SMEs), and corporate and investment banking services. Grupo BBVA is present in approximately 30 countries and serves 53 million customers. As of June 30, 2014 Grupo BBVA reported total assets of EUR 617 billion (USD 779 billion), loans and advances to customers of EUR 354 billion (USD 447 billion), deposits from customers of EUR 321 billion (USD 404 billion), return on assets of 0.52 percent and return on equity of 5.8 percent.

About International Finance Corporation

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

Sources and Additional Resources

[1] International Finance Corporation, News, IFC Purchases Bancamía Bonds to Promote Microfinance in Colombia

MicroCapital, December 24, 2014, Développement international Desjardins (DID), Financière agricole du Québec-Développement international (FADQDI) to Offer Agricultural Microinsurance, Training in Colombia

MicroCapital, December 15, 2014, Peru, Colombia, the Philippines Top 2014 Global Microscope on Microfinance Business Environment

MicroCapital, October 9, 2014, Center for Financial Inclusion (CFI), HelpAge USA Launch Research Initiative on Financial Inclusion of Older Adults in Colombia

MicroCapital, June 8, 2010, International Finance Corporation (IFC) to Invest $10m in Bancamia, a Microfinance Bank in Colombia

MicroCapital Universe Profile: Bancamía, S.A.

MicroCapital Universe Profile: Fundación BBVA Microfinanzas

MicroCapital Universe Profile: Grupo BBVA

MicroCapital Universe Profile: International Finance Corporation

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