IDB, Oikocredit, Incofin and Calvert Foundation Back Credit Cooperative in Ecuador

Feb 2011
Washington, DC , February, 15 2011 - Innovative financing arrangement between IDB and Impact Investors gives Ecuadoran rural communities the tools to grow and thrive.

The Inter-American Development Bank (IDB) has closed a $9 million syndicated loan with Jardin Azuayo, a community-based savings and loan cooperative in Ecuador. The loan will fund the co-op’s Credits for Community Development project, which channels funds to municipalities, community organizations and other local entities to finance improvements in social infrastructure such as schools and roads.

The loan consists of an A Loan of US$3 million, funded by the IDB’s Opportunities for the Majority Initiative, and a B Loan of $6 million, funded by a group of leading impact investors, comprised of Incofin, Oikocredit and Calvert Foundation.

Oikocredit provided $3 million while Incofin provided $2 million and Calvert Foundation another $1 million for the B Loan. The IDB’s portion of the loan has a tenor of 7 years, while the B Loan has a tenor of 5 years. The transaction marks the longest tenor ever for an international syndication to an Ecuadoran microfinance institution. The IDB was the lead arranger in this transaction.

The Jardin Azuayo Cooperative is based in a largely rural area of remote villages. Its microloans support a wide variety of projects, from educational programs to infrastructure improvements and development of small businesses. Through a branch system, it tailors its products and services to meet the specific needs of members in each of its communities.

“Jardin Azuayo creates local jobs by hiring villagers to administer its programs, gives people the chance to serve as leaders within their own communities, and helps ensure that programs and projects financed by the co-op are implemented effectively and appropriately,” states Johnny Jiron, the IDB Investment Officer, who helped structure the operation.

“With the syndicated loan from the IDB, we will be able to continue our expansion to support community development,” states Jardin Azuayo’s President Paciente Vásquez. The IDB loan to the cooperative will support road construction, renovation of public schools, creation of public spaces like marketplaces and parks and installation of water treatment systems. The loan will help fund an estimated 250 such endeavors.

“The IDB has built a very close relationship with impact investors, which has allowed us to mobilize funding to projects that many traditional investors would not have an appetite for, such as Jardin Azuayo in Ecuador,” explains IDB Syndication Officer Kristin Dacey, “We are very proud to be able to help connect these investors with companies that have socially responsible and financially sound business models.”

Source : IDB

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