Add us as your preferred source on Google to see more of our content in Search.
Add to Preferred SourcesIDB Invest, a member of the Inter-American Development Bank (IDB) Group, will support Locfund II’s expansion through a loan of up to $10 million. The transaction will allow Locfund II to increase the number of local currency loans to microfinance institutions, benefiting a larger number of their clients, including women-led and rural, micro- and small-sized enterprises.
This operation complements a previous IDB loan to Locfund II, approved in January 2015 consisting in an A-loan of up to $15 million funded by the IDB and a co-loan with resources from a donor fund of up to $7.5 million. The objective was to provide financing in local currency to microfinance institutions, contributing to a reduction in their foreign exchange risk exposure and to the expansion of their local currency lending capacity to micro and small-sized enterprises in Latin America and the Caribbean.
Locfund II has provided local currency loans to 47 microfinance institutions that serve more than 1.3 million clients in 13 countries in the region, meeting its initial targets. Given the continued demand, Locfund II will expand to increase the number of local currency loans to microfinance institutions in the region.
The IDB Invest loan will provide longer tenors and a more flexible repayment structure than those available for this type of vehicle in the region. It will also help to support the capital markets component of Locfund II since a portion of the loan will be used to promote local capital markets and the access of certain microfinance institutions to those markets.
Original source: IDB
Published on 1 February 2018