The Inter-American Development Bank (IDB), whose membership comprises 48 nations, recently loaned USD 93.8 million to Ecuador to on-lend as working capital to micro- and small enterprises (MSEs) in the country in an effort to sustain employment amidst the COVID-19 pandemic. The funds are intended to reach approximately 29,000 MSEs, some via savings and credit cooperatives that will enjoy guarantees from the Corporación Nacional de Finanzas Populares y Solidarias (CONAFIPS), a financial institution of the Ecuadorian government. IDB estimates that “50 percent of Ecuadorian companies would [persist] less than 37 days without sales, and 75 percent less than 70 days.”
CONAFIPS, which was founded in 2007 as the Programa del Sistema Nacional de Microfinanzas (PSNM), provides loans, guarantees and technical assistance to about 115 cooperatives and mutual aid societies.
Founded in the US city of Washington in 1959, IDB issues grants, loans and technical support intended to promote economic development, including via improved health, education and infrastructure, in its 26 member countries in Latin America and the Caribbean. The institution has a total of 48 member countries and 2,000 employees. During 2019, IDB issued USD 13 billion in loans and guarantees, bringing its total assets to USD 136 billion.
IDB is a member of IDB Group, whose other two members are IDB Invest, the trade name of the Inter-American Investment Corporation, and IDB Lab, the trade name of the Multilateral Investment Fund. IDB Invest promotes social and economic development by providing finance and training to state-owned and private enterprises. IDB Lab is an “innovation lab” that tests models for facilitating “inclusive growth.”
In Ecuador, IDB has invested USD 3.7 billion with the aim of “strengthening public finances; [providing] support for productivity and development of the private sector as engines for growth; [and] deepening of the social advances achieved over the past decade.”
By Jessica McLeod, Research Associate
Sources and Additional Resources
IDB press release
https://www.iadb.org/en/news/ecuador-will-support-financial-sustainability-smes-idb-support
CONAFIPS homepage
https://www.finanzaspopulares.gob.ec/
IDB 2019 financial report
https://publications.iadb.org/publications/english/document/Inter-American_Development_Bank_Annual_Report_2019_The_Year_in_Review.pdf
IDB homepage
https://www.iadb.org
IDB on its work in Ecuador
https://www.iadb.org/en/countries/ecuador/overview
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