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Add to Preferred SourcesIFC, a member of the World Bank Group, is structuring a transaction to provide up to $115 million in financing to Nicaragua’s Banco LAFISE BANCENTRO, S.A. to boost access to credit for small and medium entrepreneurs and increase access to housing loans for families.
In addition, IFC’s financing is linked to the development of LAFISE BANCENTRO’S climate smart portfolio for companies that want to adopt more energy efficient practices and utilize cleaner energy sources. The financing will allow more companies to access credit to invest in resource efficient and clean energy projects.
“With IFC’s support, we are helping more Nicaraguans follow their dreams – whether that means growing a business or becoming a homeowner for the first time,” said Mr. Roberto J. Zamora Llanes, LAFISE BANCENTRO’S Chairman. “IFC’s support also allows us to make funds available that are targeted to energy efficiency.”
Over the past five years, Nicaragua’s economic growth has averaged about 4.8 percent, becoming the country with the second highest growth in Central America. Despite this, poverty and inequality remain high. IFC’s loan to LAFISE BANCENTRO aims to improve access to financing and access to housing – two important needs in the country.
Small and medium enterprises in Nicaragua are an important engine for job creation, however they face a substantial credit gap of $2.4 billion. Only 15 percent of them have access to formal financing, which limits their ability to grow.
“Financial inclusion plays a vital role in economic development,” said Marcelo Castellanos, Regional Industry Manager for Financial Institutions in Latina America. “It can improve people’s lives in measurable ways by generating income and economic activity. Through this project with LAFISE BANCENTRO, IFC hopes to foster innovation and strengthen the financial sector in Nicaragua.”
Nicaragua’s government estimates that the country needs nearly one million more homes to fill its housing deficit. IFC’s loan will help LAFISE BANCENTRO grow its housing portfolio to provide additional mortgage loans.
LAFISE BANCENTRO will also use the funding to provide loans to finance climate smart projects. By introducing green finance standards into LAFISE BANCENTRO’s lending practices, IFC hopes to encourage other Nicaraguan financial institutions which are unfamiliar with this market to follow suit.
Original source: IFC
Published on 14 March 2018