IDB Invest and FinDev Canada to Help Strengthen Banco de Occidente's Regulatory Capital in Colombia
IDB Invest and FinDev Canada are joining efforts to strengthen the regulatory capital, Tier II, of Banco de Occidente S.A. (Banco de Occidente) in Colombia, through two parallel subordinated loans for a total of $100 million, of which IDB Invest contributed $70 million, and FinDev Canada the remaining $30 million.
This financing will supportthe expansion of Banco de Occidente's portfolio of Colombian small and medium-sized enterprises (SMEs), facilitating access to credit. Currently, in Colombia only 40% of SMEs can access financing, although they contribute to more than a quarter of national GDP
For Banco de Occidente, the SME segment is of great strategic importance. Therefore, this deal, with a term of up to 10 years, will support the growth strategy of this portfolio, and will consolidate this segment as a priority in new financing of working capital, capital investment and fixed assets, with the consequent positive impact for thousands of small businesses in the country.
Additionally, IDB Invest will provide Banco de Occidente with advisory services in order to help design and implement its sustainable financing strategy.
In this way, specific growth objectives will be defined for each segment of the portfolio (SMEs, SMEs led or owned by women and uses of green or blue funds), impact measurement indicators will be established at the final beneficiary level, and action plans will be implemented for the development and strengthening of internal capacities in Banco de Occidente.
“This deal ratifies IDB Invest's commitment to strengthen and support access to financing for SMEs, guaranteeing access and financial opportunities for Colombian companies. The collaborative work with Banco de Occidente and FinDev Canada fills us with pride,” said James Scriven, general manager of IDB Invest.
“At Banco de Occidente we seek to promote sustainable financing on the basis of SDGs as a fundamental part of our strategy and, for this reason, as a financial entity we want to provide support for the Colombian business sector. This collaborative work with IDB Invest and FinDev Canada fills us with pride and highlights our management throughout these years as a benchmark when it comes to offering credit options for SMEs," said Banco de Occidente Chairman César Prado Villegas.
“FinDev Canada is proud to partner with Banco de Occidente and IDB Invest on this important transaction, which will help alleviate the financing gap for underserved SMEs and women-owned enterprises in Colombia,” said Paulo Martelli, Vice President and Director of FinDev Canada Investments.
The deal is expected to contribute to the following United Nations Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9) and Partnerships for the Goals (SDG 17).
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 $15.3 billion in asset management and 375 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 FinDev Canada
FinDev Canada is Canada's development finance institution dedicated to supporting sustainable and inclusive private sector growth and investment in emerging and developing markets to advance women's economic empowerment, climate action and local market development. FinDev Canada is a subsidiary of Export Development Canada (EDC). More information about FinDev Canada is available at www.findevcanada.ca.
About Banco de Occidente
Banco de Occidente is a financial institution belonging to Grupo Aval Acciones y Valores. It was founded in Cali, Colombia, in 1965 and, since then, it has worked under a culture of leadership, innovation, opportunity and effectiveness to fulfill his purpose: to make the development of people, business growth and the transformation of the country a reality. The organization has more than 7,000 collaborators and has a differentiating product and service offer that generates value for all stakeholders and has allowed it, over the years, to earn the trust of the community, customers and shareholders.