MICROCAPITAL STORY: International Finance Corporation (IFC), a Member of the World Bank Group, to Lend $20m in Debt and Invest $400k in Advisory Services to Banco Ficohsa of Honduras

The International Finance Corporation (IFC), a member of the World Bank Group, will invest up to USD 20 million in debt and USD 400,000 in advisory services for the expansion of the small and medium enterprise (SME) lending and housing finance operations of Banco Ficohsa, the third largest bank in Honduras.

The bank, which has 75 branches and 200 ATMs throughout Honduras, will be able to increase lending to SME entrepreneurs and to those seeking housing loans for mortgages and home improvements. The IFC will provide advisory services for two years, during which the bank’s policies, market strategy, credit methodology, and portfolio administration will be assessed and improved.

Established in 1956, the IFC is a multilateral institution within the World Bank Group based in Washington, DC. It seeks to promote sustainable private sector investment in emerging economies worldwide. As of June 2007, the IFC has a committed portfolio of USD 660 million in Central America. As calculated from its 2007 financial statements, its return on assets was 6.46 percent, and its debt-equity ratio was 186.98 percent.

Banco Ficohsa is a commercial and retail bank founded in 1994 in Honduras under the auspices of Grupo Financiera Ficohsa. According to financial statements for 2007 published on its Web site, the bank has total assets of HNL 20.5 billion, equivalent to USD 1.1 billion. Calculated from figures from the nine months ended September 2007, Ficohsa’s return on assets was 1.11 percent, and its debt-equity ratio was 1,074.41 percent. The bank has approximately 300,000 borrowers and is rated BBB+ by Fitch Ratings.

By Stephen Son

Additional Resources:

IFC: “IFC Investment to Expand Access to Housing and SME Finance in Honduras”; About IFC

Banco Ficohsia: ¿Quiénes Somos?; Resumen Financiero (Spanish)

MIX Market: Profile for IFC

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