• The deal aims to boost sustainable investments and provide vital financing to micro, small, and medium-sized businesses, especially in the agribusiness sector.

IDB Invest is the lead investor in the issuance of up to 339 million Mexican pesos (around $17.3 million) in asset backed securities (ABS) with a sustainable thematic label. This is a first-in-kind public issuance in Mexico, in which the bond is backed by loans from four non-bank financial institutions –CRESCA, Proaktiva, Sefia, and SFI— who offer loans to businesses, particularly micro, small, and medium-sized enterprises (MSMEs) in Mexico's agribusiness sector.

In recent years, funding for smaller non-bank financial institutions has been limited on an individual basis, especially those with less financial backing and no history of issuing bonds in public markets. The agricultural sector is vital to Mexico’s economy, employing about 27 million workers (21% of the population), according to the 2022 census.

Despite contributing 4% to the national GDP, only 2.5% of commercial bank loans go to agriculture. While access to financing has improved, small-scale producers still face challenges, with just 5.3% of them, or 265,508 producers, receiving any type of credit in 2022.

The sustainable bond issuance, structured by Inteligencia Capital, was approved for up to 1.5 billion Mexican pesos. As part of IDB Invest's commitment to partner with institutions that share our mission, IDB Invest subscribed 203.4 million Mexican pesos of the first issuance. The remaining 135.6 million Mexican pesos was subscribed by the North America Development Bank (NADBank) and other institutional and private investors. This issuance includes a 20% partial guarantee from FIRA (Fideicomisos Instituidos en Relación con la Agricultura in Spanish).

The financing is complemented by advisory services provided by IDB Invest and NADBank, helping participants design and implement a thematic portfolio management system, create standardized thematic portfolio reports for public disclosure, and review the newly developed Environmental and Social Management Systems (ESMS) for each participant.

This project will contribute to the following United Nations Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Climate Action (SDG 13), and Partnership for the Goals (SDG 17). In addition, it is expected that objectives Zero Hunger (SDG 2), Gender Equality (SDG 5), Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Reduced Inequalities (SDG 10), Sustainable Cities and Communities (SDG 11), Sustainable Consumption and Production (SDG 12) and Life of Terrestrial Ecosystems (SDG 15), will be supported through the use of bond funds.

About IDB Invest

IDB Invest, a member of the Inter-American Development Bank 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 $21 billion in assets under management and 394 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 Inteligencia Capital

Inteligencia Capital is a boutique investment bank and a structuring agent that specializes in serving small to mid-sized firms and non-bank financial intermediaries. The firm is dedicated to helping well-managed companies become institutionalized and professionalized, assisting them in achieving their goals for growth, development, and financing. These efforts are aligned with best practices and international standards set by funders. Accordingly, its mission is centered on providing a platform for financial innovation and facilitating the inclusion of companies and financial institutions in sophisticated financing structures that enhance their capital structure.

About FIRA and FEGA

The Trusts Instituted in Relation to Agriculture (FIRA) in Mexico are four public trusts that are part of the Mexican Public Administration. They operate as economic development funds within the Mexican Financial System using a second-tier model, deploying their resources through various financial intermediaries. The main goal of FIRA is to support the development of the country's rural, agricultural, forestry, and fisheries sectors by providing credit, guarantees, training, technical assistance, and technology transfer. This support enables rural producers and businesses to start or expand their productive projects.

The Guarantee Service offered by FIRA aims to ensure the partial recovery of eligible credits, whether these are funded with resources from financial intermediaries or with FIRA's own resources. In other words, it acts as a complement to the guarantees provided by the borrower in favor of the financial intermediary as backing for the granted credit.

FEGA is one of the four trusts managed by the Fideicomisos Instituidos en Relación con la Agricultura (“FIRA”) and set up by Banco de Mexico with the purpose of financing the agricultural sector.

About Crédito Especializado al Campo SA de CV SOFOM ENR (CRESCA)

CRESCA is part of the Grupo Rodríguez business group with over 40 years in the agri-food sector. It was established in November 2007 with the purpose of providing credits for the acquisition of agricultural machinery in the State of Mexico and Michoacán. Currently, it provides financing to SMEs in the central and southern region of Mexico. Its credit portfolio consists mostly of revolving, refinance, and simple credits, as well as credits for the specific acquisition of tractors and transportation equipment. In addition to financing companies within the agribusiness sector, it also provides credit to companies in the service and commerce sectors.

About Proaktiva SAPI de CV SOFOM ENR (Proaktiva)

Proaktiva was established in March 2008 in Baja California with the aim of providing credits to the agricultural sector, although it currently also focuses on financing small and medium-sized enterprises in the region. Its operations are concentrated in the northwest region of the country, where it has most of its portfolio and where its branches are located. It provides productive credit aimed at agribusiness (60%), covering 18 productive chains, and SMEs (40%) diversified across the commerce and services sector.

About Servicios y Financiamiento Agrícola SA de CV SOFOM ENR (Sefia)

Sefia was established in 2005 in Querétaro and focuses on providing specialized financial services to the agricultural and livestock sector in Mexico. It is part of the Grupo Tractores del Norte, a company with over 60 years of experience in the marketing of tractors, agriculture and farming equipment, and agriculture products. Currently, it has eleven branches, mainly in the North and Bajío regions of the country. The financial institution benefits from synergies with the sales force of the group's machinery distribution chain.

About Soluciones Financieras Internacionales SA de CV SOFOM ENR (SFI)

SFI is part of the Chapa Quiroga Group, which consists of six companies strategically dedicated to primary production, financing and marketing of grains, and agricultural machinery. It was established in August 2004, with the objective of functioning as the group's financial arm. Currently, it offers financing services to suppliers of the Chapa Quiroga Group and clients in the agricultural sector, focusing mainly on corn, wheat, and soy crops, with its main operating area being the state of Tamaulipas.

About North America Development Bank (NADBank)

NADBank is a financial institution established and capitalized in equal parts by the United States and Mexico for the purpose of financing environmental infrastructure projects along their common border. As a pioneer institution in its field, the Bank is working to develop environmentally and financially sustainable projects with broad community support in a framework of close cooperation and coordination between Mexico and the United States. For more information about NADBank, visit: nadb.org.