MICROCAPITAL BRIEF: International Finance Corporation (IFC) Syndicates Loans Totaling $60m to BBVA Paraguay to Fund Small, Medium-sized Enterprises

The International Finance Corporation (IFC), a member of the World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, has announced that it will loan a total of USD 60 million to Banco Bilbao Vizcaya Argentaria Paraguay (BBVA Paraguay), a subsidiary of the Spanish financial services group BBVA. A loan of USD 40 million and a loan of USD 20 million will be disbursed with terms of five years under the IFC-managed Co-Lending Portfolio Program, which participates in syndications with other organizations. No information is available regarding any funding committed to this project by other investors to date.

It is expected that the funding will provide financial access to small and medium-sized enterprises (SMEs) that operate in the “export sector”[1]. Mr Rafael González Moya, the chairman and CEO of BBVA Paraguay, said, “We welcome IFC’s continued support to BBVA Paraguay’s expansion. This new investment strengthens our position in the country’s financial system, particularly for small and medium enterprises, which are essential to trade, economic development and job creation in the country”[1]. Mr Salem Rohana, IFC’s country manager for Argentina, Chile, Paraguay, and Uruguay, added that “we look forward to continuing to strengthen our long-term partnership with BBVA Paraguay by helping the bank’s serve important economic sectors and create a more inclusive financial marketplace”[1].

IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. IFC’s goals in Paraguay are to support micro-, small and medium-sized enterprises (MSMEs) and promote trade and the protection of natural resources. BBVA Paraguay joined the Global Trade Finance Program of IFC in 2009. In that year, BBVA Paraguay benefitted from a trade finance facility of USD 15 million, which was later increased to USD 30 million. In 2010, IFC disbursed a loan of USD 30 million to BBVA Paraguay to finance MSMEs that operate in the agricultural sector. In 2012, IFC disbursed USD 25 million to BBVA Paraguay to fund local farmers and agricultural trade in the country. 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.

By Alíz Crowley, Research Associate

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 provides $60 million to BBVA Paraguay to Expand Access to Finance for Small and Medium Enterprises in Export Sector

[2] HispanicBusiness.com, Paraguay: IFC provides $60 million to BBVA Paraguay to Expand Access to Finance for Small and Medium Enterprises in Export Sector

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MicroCapital, October 3, 2014, India’s PNB Housing Finance Borrows $50m from International Finance Corporation (IFC) for Mortgages for Low-Income Families

MicroCapital, April 8, 2013, Absolute Portfolio Management Loans $9m from Dual Return Funds to Microfinance Institutions (MFIs) in Armenia, Benin, Cambodia, Georgia, Mongolia, Paraguay, Peru and Tajikistan

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