IDB Invest, Cordada Strengthen Access to MSMEs in Chile, Peru & Mexico
IDB Invest has granted $15 million worth of financing for Cordada SpA, in deal with a renewable two-year term that seeks to strengthen financing operations in Chile, Peru and Mexico originated by local Non-Bank Financial Intermediaries (IFNBs). NBFIs oriented to MSMEs are essential to efficiently grant financing to this vulnerable segment, neglected by traditional banks.
The project will enable the growth of Cordada's NBFI and MSME portfolio, which is expected to contribute more generally to increasing access to financing for MSMEs in Chile, Peru and Mexico. In developing countries, 41% of formal MSMEs are unable to cover their financing needs. The financing gap for MSMEs in these countries amounts to $5 trillion, of which $1.2 trillion corresponds to the deficit of LAC MSMEs.
The project will also have Technical Advisory Services. On the one hand, IDB Invest will support Cordada to strengthen its corporate governance (CG) so that Cordada can promote the development of stronger CG practices internally and in the NBFIs with which it operates. On the other hand, Cordada, with the support of an independent third party, will contract a consultancy to improve its AML practices in line with international good practices.
This operation is expected to contribute to two United Nations Sustainable Development Goals (SDGs): 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 $14.1 billion in asset management and 325 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.
Cordada is an IFNB founded by Andrés Prats, Pablo Valenzuela and Germán Larraín in association with Frontal Trust, with the purpose of accelerating the development of MSMEs in Latin America. It has 75 small financial and fintech companies as strategic partners, a specialized team and cutting-edge technology that allows it to impact the financial inclusion of 3,542 MSMEs in Chile, Peru and Mexico. It has a portfolio of $110 million in assets under management.