MICROCAPITAL BRIEF: Banco Santander, IFC Lending $300m to Bradesco to Support MSMEs in Brazil

The International Finance Corporation (IFC), a member of the World Bank Group, has agreed to syndicate a loan of USD 300 million for Brazil’s Banco Bradesco to support its lending to micro-, small and medium-sized enterprises (MSMEs). IFC and Spanish commercial bank Banco Santander are each providing half of the funding. In particular, the money is to be used to support “arranjos produtivos locais” (APLs), government-organized groups of firms that collaborate for their mutual benefit. According to IFC, Bradesco “is active in 423 APLs in 1,543 municipalities, covering 57 different economic sectors and more than 40,000 companies throughout Brazil.”

Founded in 1943 and headquartered in city of Osasco, Bradesco is a commercial bank with total assets of BRL 1.5 trillion (USD 390 billion), a gross loan portfolio of BRL 523 billion (USD 135 billion) and customer deposits of BRL 320 billion (USD 82 billion) as of 2017.

Founded in 1857, Banco Santander is a provider of financial services via 600 locations, concentrated in Europe and the Americas. In 2017, Santander reported total assets of EUR 1.4 trillion (USD 1.6 trillion), a gross loan portfolio of EUR 849 billion (USD 971 billion) and customer deposits of EUR 778 billion (USD 890 billion).

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2017, IFC reports total assets of USD 92.3 billion, and it has 184 member countries.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2018, it has 189 member nations. The group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2018, the World Bank Group disbursed funds totaling USD 46 billion.

By Michelle Fleming, Research Associate

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/86977907F10EE08A8525836600443077

Banco Bradesco homepage
https://banco.bradesco/html/classic/index.shtm

Description of APLs from the government of the Brazilian state of Sao Paulo
http://www.desenvolvimento.sp.gov.br/arranjos-produtivos-locais-(apls)

Santander homepage
https://www.santanderbank.com

Santander financial information
https://www.santander.com/csgs/Satellite/CFWCSancomQP01/en_GB/pdf/Complete_book_2017.pdf

IFC homepage
https://www.ifc.org/

World Bank homepage
https://www.worldbank.org

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