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IDB Invest and Banco Guayaquil support Ecuador's MSME with a $20 million social bond

  • This is the first social bond aimed at financial inclusion, issued by a private financial institution in Ecuador

IDB Invest, a member of the IDB Group, structured and subscribed a $20 million social bond issued by Banco Guayaquil S.A. with a 5-year tenor. This bond represents the first social bond aimed at financial inclusion, issued by a private financial institution in Ecuador.

The resources from the placement of the social bond will be used to support the sustainability of micro, small and medium-sized enterprises (MSME) in Ecuador, one of the sectors most impacted and least resilient to the COVID-19 crisis. The financing will also contribute to the development of the capital markets and thematic bonds in Ecuador and the region.

Support for microenterprises will be carried out through the platform of non-bank correspondents with the highest coverage in the country, called Banco del Barrio, a financial inclusion program promoted by Banco Guayaquil. The credits will be directed to micro-businesses in Ecuadorian cities most affected by COVID-19 and it is estimated that the bond will benefit approximately 26,000 micro-businesses throughout the country.

As part of the bond issuance process, IDB Invest advised Banco Guayaquil in the design of the methodological framework for the use of funds, which contains the criteria for selection, monitoring and evaluation of projects, aligned with the principles of social bonds of the Association International Capital Markets (ICMA). Additionally, IDB Invest supported Banco Guayaquil in obtaining an independent review of the methodological framework, known as a second-party opinion, issued by Vigeo Eiris, an external consultant specialized in this type of project.

This operation can potentially contribute to three United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Decent Work and Economic Growth (SDG 8), and Industry, Innovation and Infrastructure (SDG 9).

About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.  

About Banco Guayaquil
Banco Guayaquil is one of the main financial entities in Ecuador, with 97 years of experience and AAA rating. It has a long history in the Ecuadorian market and is the bank with the highest coverage nationwide, with a presence in all the country's provinces. Its excellent reputation in the financial environment allows it to have adequate access to international market funding and clear stability prospects. Banco Guayaquil's technological network has constituted a fundamental support for the management of its clients' operations, which have an important network of channels and services throughout the national territory. Banco Guayaquil has more than 10,000 service points nationwide, has 2,840 employees, where 57% are women and 57% have a secondary education level. At present, Banco Guayaquil has more than 2,600,000 clients.