IFC Boosts Financial Access for SMEs in Colombia With New Loan to Banco Pichincha
IFC, a member of the World Bank Group, strengthened its support to Colombia’s small and medium sized enterprises (SMEs) with a new US$80 million loan to Banco Pichincha, a bank that strives to sharply boost its lending to Colombian SMEs and low-income students.
IFC’s loan, which consists of US$50 million from its own account and $30 million to be mobilized by IFC from other investors, will also reinforce Banco Pichincha’s role as a private-sector leader in student loans in Colombia. IFC’s loan is expected to help Banco Pichincha nearly triple its loans to SMEs by 2019 and also increase its portfolio of tertiary education loans.
“IFC’s support to our institution will help us continue to expand our work with SMEs and ensure that they are able to access financing for their operations and growth in Colombia,” said Eduardo Fernández-Salvador, Banco Pichincha’s chief executive officer. “This loan will also bolster our education lending for lower to middle income students, which creates a path for social mobility and can open doors to better, more stable and higher paying jobs,” he said.
For IFC, the loan to Banco Pichincha is part of its efforts to boost financial inclusion in Colombia. Recent data suggests that only 53 percent of SMEs in Colombia have an outstanding loan or line of credit with a financial institution, compared to 79 percent in Chile. Boosting financial access for SMEs is crucial to the country’s sustainable growth as they are key driver of economic activity and job creation.