IFC Provides $100m to a Mid-sized Brazilian Bank to Support SMEs Impacted by COV...

Print
 
Jul 2020
Brazil, July, 15 2020 - IFC, a member of the World Bank Group, is providing a US$ 100 million loan to support Banco Daycoval, a leading mid-sized Brazilian bank, expand access to finance for small and medium enterprises (SMEs), including women-owned businesses.

IFC’s investment will allow Daycoval to support SMEs preserve jobs and face the impacts of the COVID-19 pandemic. This is especially critical to help Brazil combat the negative shocks caused by the COVID-19 pandemic on the economy, as SMEs are a key sector for employment and economic growth in the country.

This loan to Daycoval is being granted as part of IFC’s global response to combat the economic impacts of the COVID-19 pandemic. IFC has implemented a US$ 8 billion package of fast-track financing to its clients worldwide to help sustain economies, support businesses and protect jobs.

IFC’s investment consists of a one-year senior loan facility, renewable for up to one additional year, to support Daycoval’s working capital and trade-related lending program to SMEs that have been affected by the COVID-19 pandemic. At least 20% of the working capital line will be earmarked for women-owned SMEs, with blended finance funding provided by the Women Entrepreneurs Opportunity Facility (WEOF), a global facility dedicated to expanding access to capital for women entrepreneurs.

“This investment will allow Daycoval to continue to support SMEs, including those owned by women, helping them face the negative economic shocks caused by the pandemic,” said Rogerio Santos, IFC’s head of Financial Institutions for Brazil and the Southern Cone. “In addition to supporting our clients face the challenges of the pandemic, IFC is helping preserve jobs and supporting economies to accelerate its recovery process,” he adds.

SMEs play a critical role in Brazil’s economy as they generate jobs and provide essential goods and services, fostering economic growth and contributing to a dynamic private sector. According to IFC MSME Finance Gap Database, SMEs face unmet financing needs of over US$ 437 billion, which inhibits the increase in productivity and limits their growth. Granting SMEs access to financial services is vital to closing that gap and promoting the sector’s growth, and even more important amid the economic turmoil caused by the pandemic.

“Daycoval is very pleased with this new investment from IFC as it will allow us to expand the scope and improve the efficiency of our work with SMEs, including those owned by women, which play such a relevant role in the Brazilian economy,” says Ricardo Gelbaum, Daycoval’s Investor Relations Officer. “We want to support the business continuity of our clients during the economic crisis caused by the pandemic,” he adds.

Daycoval is a leading mid-sized Bank in Brazil, specialized in corporate credit, payroll-deductible loan, foreign exchange, and investments. IFC’s investment will strengthen the long-standing partnership with Daycoval, which has been a key partner in reaching IFC’s strategic objectives in Brazil over the last 13 years, through eight projects including long-term finance, trade lines and an equity investment.

Over the last five fiscal years, IFC invested over US$ 2.5 billion in the Brazil’s financial sector, in long-term investments, including mobilization from third parties. In the fiscal year 2019, IFC’s long-term investments in Brazil, across all sectors, totaled US$ 2.5 billion, including US$ 1.9 billion mobilized from other investors. IFC has been investing in Brazil’s private sector since 1957 to address the country’s most critical development challenges, including those of the urbanization, social inclusion, competitiveness and productivity, and management of natural resources.

Charlotte Keenan, Global Head of Goldman Sachs 10,000 Women, said, “WEOF is committed to building the capacity of local banks to mitigate against the disproportionately adverse impact of COVID-19 on women-led businesses. This innovative partnership allows us to support scale of working capital finance for WSMEs in emerging markets to ensure resources for their continued growth through challenging economic times.”  WEOF was launched in 2014 by IFC, through its Banking on Women program, and Goldman Sachs 10,000 Women. To date, WEOF has supported 55 financial intermediaries in 33 countries. The cumulative investment amount stands at US$ 1.83 billion. The facility has already reached 73,000 women entrepreneurs through its investments and is on track to reach 100,000 women globally.



Source : World Stage
 

Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More