IDB Invest, AVLA to Improve MSME Access to Financing in Chile

IDB Invest, a member of the IDB Group, has provided a $40 million warehouse line of credit to Fondo de Inversión Privado Sartor MHE, a private investment fund in Chile structured for this transaction, seeking to help improve funding access for local micro, small and medium enterprises (MSME).

The proceeds of the warehousing line will be used to purchase and accumulate endorsable mortgage loans originated by Creditú Administradora de Mútuos Hipotecarios S.A. (part of AVLA S.A.) and insured by AVLA Seguros de Credito S.A., for a future asset backed securitization in the Chilean local capital markets. The line is expected to support several securitization cycles and has a maximum availability period of 6 years.

The warehouse facility will support and improve MSMEs access to financing in Chile through an innovative credit insurance product that AVLA S.A. offers to its MSME clients, which allows them to access more competitive funding costs. Moreover, the financing is expected to allow for more favorable terms and more efficient loan structures for the borrowers, consequently expending the available liquidity in the Chilean MSMEs ecosystem during the COVID-19 pandemic.

Additionally, the project will support several future MSME loan ABS issuances, enabling the creation of a new asset class in the Chilean capital markets that eventually contributes to the allocation of institutional money for small and medium enterprises.

This transaction contributes to three United Nations Sustainable Development Goals (SDGs): Decent work and economic growth (SDG 8), Industry, innovation and infrastructure (SDG 9), and Responsible consumption and production (SDG 12).

 

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 AVLA

AVLA is a global insurance group that offers comprehensive insurance solutions across its surety, trade credit, SME credit and mortgage credit products. AVLA currently has operations in Chile, Peru, and Mexico and has supported more than 50,000 small- and medium-sized businesses to date across the region. For more information, visit www.avla.com.