IDB Invest, DFC and FinDev Canada support SME, women-led SME and green financing in Colombia with Davivienda
IDB Invest, a member of the IDB Group, U.S. International Development Finance Corporation (DFC) and FinDev Canada provided subordinated loans totaling $390 million to Banco Davivienda S.A. (Davivienda). The 10-year tenor deal will contribute to strengthening Davivienda's business and to support its growth strategy, including its small and medium-sized enterprise (SME) portfolio as a key priority segment.
The funds from these loans will be used to provide new financing for working capital, capital investment and fixed assets to Davivienda clients in the SME and women-led SME portfolios, which have suffered the negative impact of the health and economic crisis generated by the COVID-19 pandemic.
The loan also includes a tranche of blended financing from the Canadian Climate Fund for the Private Sector in Latin America and the Caribbean, Phase II (C2F), which is managed by IDB Invest, for $20 million with a tenor of 7 years. The resources of this will be used to promote environmentally friendly businesses. Davivienda will see a reduction in the interest paid once it achieves the goals and milestones related to the green portfolio and risks.
Additionally, IDB Invest will support Davivienda with advisory services to develop a roadmap to increase its green portfolio. This advice will promote not only the financing of low-carbon economic activities but will also strengthen the bank's operational and financial resilience in the face of climate change.
This loan promoting women-led SME, coupled with the strong female representation in Davivienda’s management, qualifies Davivienda for the 2X CHALLENGE, a global initiative that seeks to mobilize capital towards enterprises that benefit women.
This operation potentially contributes to six United Nations Sustainable Development Goals (SDGs): Gender Equality (SDG 5), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Responsible Consumption and Production (SDG 12), Climate Action (SDG 13), and Partnerships for the Goals (SDG 17).
The deal exemplifies the good working relationship between IDB Invest and Davivienda that began last year with the world's first issuance of a gender-linked bond based on achieving outcomes.
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.
U.S. International Development Finance Corporation (DFC) is the development bank of the United States of America. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today, investing in sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights and workers' rights.
About FinDev Canada
FinDev Canada is an institution dedicated to providing financial services to the private sector in developing countries in order to combat poverty through economic growth with an emphasis on the following areas: economic development through job creation, empowerment of women and mitigation and adaptation to climate change. FinDev Canada is a subsidiary of Export Development Canada (EDC).
Davivienda believes in a financial world that simplifies the lives of people, communities, businesses and cities. As a result, today they are a team of more than 17,000 people in Colombia, Panama, Costa Rica, Honduras, El Salvador and Miami, innovating, investing in knowledge, talent and technology, collaborating and seeking to implement the best practices worldwide. They do all of this to provide everyday solutions and exclusive offers to more than 16.0 million customers, enabling greater financial inclusion and sustainable development. As of September 2020, it is the second largest bank by portfolio in Colombia, with a network of 680 branches and nearly 2,700 ATMs in Colombia and international subsidiaries. Davivienda is one of the companies belonging to Grupo Bolívar.