The Inter-American Development Bank (IDB) recently announced that funds totaling USD 829,300 will be invested in a project for Uruguayan Institute for Economic and Social Development’s (IPRU) female and youth entrepreneurship in Uruguay’s capital Montevideo and district Saladero de Salto. USD 600,000 of the funds will come directly from IDB and USD 229,300 will come from counterpart financing from Uruguay. The IDB’s contributions will come through its Social Entrepreneurship Program (SEP), which aims to make credit available to the financially excluded. SEP is managed and administered by the IDB’s Multilateral Investment Fund (MIF), which promotes inclusive private sector growth through grants and investments. USD 125,000 will be given in the form of a grant, while USD 200,000 will be given through a seven year loan that includes a two year grace period. The interest rate has not been specified. Finally, USD 275,000 has been allocated for “technical cooperation financing” and is funded directly from the IDB’s Italian Trust for Microenterprise Development.
Established in 2002, the Italian Trust for Microenterprise Development provides micro-credit and technical assistance to projects in the Latin America and Caribbean Region with funding ranging from USD 258,000 to USD 520,000. It is financed by the Italian Ministry of Foreign Affairs and as of December 2007, the trusts investment’s had summed USD 8.8 million. The trust has done 16 previous projects with the IDB.
Established in 1965, IPRU aims to promote education, housing improvement projects and microfinance throughout Uruguay. The IDB project has designated the allocated funds to youth and women programs for entrepreneurship and employment. Though no specific information is available on how IPRU will delegate the funds from IDB, previous IPRU micro-loans are characterized by a USD 3,100 maximum, a 24 month repayment period and an interest rate at 25 percent. IPRU does not report to MIX Market, the microfinance information clearinghouse.
By Sarah Knapp, Research Assistant
The Inter-American Development Bank: Annual Report 2007, Multilateral Investment Fund (MIF), Press Release, Project Proposal, Social Entrepreneurship Program (SEP)
Italian Trust for Microenterprise Development.
Uruguayan Institute for Economic and Social Development