MICROCAPITAL BRIEF: CFE to Launch Agricultural Loans in Panama with Technical Assistance, $3.4m in Debt Finance from Huruma

Centro Financiero Empresarial (CFE), a lender to homeowners, microenterprises and small businesses in Panama, recently borrowed EUR 3 million (USD 3.4 million) from Huruma Fund, a Spain-based public-private partnership supporting rural finance in low- and moderate-income countries. While 61 percent of CFE’s customers live in rural areas, it serves farmers with conventional business loans. CFE plans to use the new loan funds and associated technical assistance from Huruma to launch a loan product with terms specifically designed to meet farmers’ income patterns and other needs. CFE reports total assets of PAB 58 million (USD 58 million) as of December 2020.

The goal of Huruma is to improve financial access for small-scale farmers in Africa, Asia, Latin America and the Caribbean. The fund is led by Spain’s Compañia Española de Financiación del Desarrollo (COFIDES), a government-backed development finance institution. Gawa Capital Partners, a private firm also based in Spain, serves as the fund’s investment advisor. Huruma has a volume of EUR 120 million (USD 140 million), of which three quarters is from private investors. As of February 2022, it has deployed EUR 30 million (USD 34 million) in debt and equity investments, all in Latin America.

Gawa is a Spain-based impact investing fund manager. Founded in 2009 by Agustin Victoria and Luca Torre, the firm aims to “improve the life of low-income communities by promoting investment in social enterprises.” As of 2021, Gawa advises four impact investment funds with a total value of EUR 196 million (USD 226 million). Gawa launched three of those funds, Gawa Microfinance Fund, Global Financial Inclusion Fund and Huruma Fund.

COFIDES is controlled by three entities of the Spanish government. Its other shareholders are three Spanish banks and the CAF Development Bank of Latin America, which is based in Venezuela and was formerly known as Corporacion Andina de Fomento. COFIDES manages funding from the EU, the UN Green Climate Fund and the following entities owned by the government of Spain: Fondo para Inversiones en el Exterior (FIEX), Fondo para Operaciones de Inversión en el Exterior de la Pequeña y Mediana Empresa (FONPYME) and Fondo para la Promoción del Desarrollo (FONPRODE). As of the close of its 2020 fiscal year, COFIDES managed assets totaling EUR 1.1 billion (USD 1.3 billion).

Sources and Additional Resources

CFE homepage
https://cfe.com.pa/

Huruma press release
https://fondohuruma.com/en/the-huruma-fund-completes-two-investments-in-panama-aimed-at-farmers-in-underserved-areas/

Gawa homepage
https://www.gawacapital.com/

COFIDES homepage
https://www.cofides.es/

More news from MicroCapital on Huruma
https://www.microcapital.org/?s=Huruma

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