MICROCAPITAL BRIEF: BBVA Colombia Borrows $150m from IFC for Housing Lending, Expects Government to Subsidize Mortgage Rates

BBVA Colombia, a unit of Spain’s Grupo Banco Bilbao Vizcaya Argentaria (BBVA), is borrowing USD 150 million from the World Bank Group’s International Finance Corporation (IFC) to on-lend for housing. This comes as the government of Colombia is considering a plan to “reduce prices on the acquisition of housing loans for the middle class through subsidies to mortgage interest rates.”

Oscar Cabrera Izquierdo, the Executive President of BBVA Colombia, describes the “housing sector as one of the most important to promote the improvement of the living conditions of Colombians, and one of the fundamental links…to the growth of other subsectors.”

BBVA Colombia has 2.2 million customers, 5,200 staff members, 1,300 automated banking machines and 373 branches. As of December 2017, Grupo BBVA has EUR 690 billion (USD 820 billion) in total assets and 72 million customers in 30 countries.

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. IFC has 184 member countries and total assets of USD 95 billion as of September 2017.

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 Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (2) the International Finance Corporation (IFC); (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During 2017, the World Bank Group disbursed funds totaling USD 44 billion.

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/ifcext/pressroom/ifcpressroom.nsf/0/6A674EAB2383AFDE8525826C005CB890?OpenDocument

BBVA financials
https://www.bbva.com/en/results-4q17/

IFC budget for fiscal year 2018
http://www.ifc.org/wps/wcm/connect/cbd63894-c62a-453c-bfc8-92b8f8a3155f/IFC+FY18+Q1+MDA+and+FS_FINAL.pdf?MOD=AJPERES

World Bank Group
http://worldbankgroup.org/

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