- This is the first issuance of a social bond for financial inclusion with a gender lens, aimed at women microentrepreneurs
IDB Invest, a member of the IDB Group, structured and subscribed a social bond with a focus on financial inclusion with a gender lens. The bond was issued by the Caja Municipal de Ahorro y Crédito Arequipa (Caja Arequipa) for the amount of 57.64 million Peruvian soles, equivalent to $16 million, and with a tenor of 8 years. It will be issued in the capital markets aimed at institutional investors in Peru, and will be fully acquired by IDB Invest.
This is the first issuance of a social bond for financial inclusion with a gender lens aimed at women microentrepreneurs. It is also the first issuance of subordinated bonds made by a municipal bank in Peru, as well as the first subordinated bond issue placed by a municipal bank in the country.
The resources from the bond placement will be used to support its growth strategy in portfolios aimed at women microentrepreneurs in Peru and to finance the strengthening of Caja Arequipa's assets.
In addition, it will contribute to the development of the capital markets and thematic bonds in Peru and the region. It is expected to give a signal to other actors in the microfinance segment to improve their mechanisms for measuring and monitoring financial inclusion, such as loans to women microentrepreneurs.
Caja Arequipa aims to achieve growth levels for micro and small businesses (MYPE) led by women, through the various types of loans that the entity grants, and especially through its product Supérate Mujer, aimed exclusively at this segment. Existing products consist of loans in which women have their own and independent micro-business activity in the agricultural, commercial, production and service sectors, and who want to increase their working capital or make investments to improve, buy and renew their equipment and machinery.
As part of the bond issuance process, IDB Invest advised Caja Arequipa 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 Caja Arequipa in obtaining an independent verification of the methodological framework and labeling of the social bond, 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 five United Nations Sustainable Development Goals (SDGs): End Poverty (SDG 1), Gender Equality (SDG 5), Decent Work and Economic Growth (SDG 8), Industry , innovation and infrastructure (SDG 9) and Reduction of inequalities (SDG 10).
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 Caja Arequipa
The Caja Municipal de Ahorro y Crédito Arequipa (Caja Arequipa) Arequipa, is a leading institution within the CMAC system. It provides microcredit services, mainly to micro and small companies, as well as to sectors of the population that do not have access to traditional banking in Peru. Caja Arequipa was the first entity of its kind to issue a bond in the local market, and to develop a responsible finance strategy with an independent rating. Its modernization and digitization efforts keep it at the forefront. As of November 2020, it has 3,911 employees and 180 agencies nationwide, with 396,384 loan clients and 1,160,241 depositors