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The International Finance Corporation (IFC), Malta-based FIMBank and Brazilian lender BicBanco have launched the joint venture BrasilFactors to offer domestic and cross-border factoring services to SMEs in Brazil, FIMBank announced.
The initial equity investment is for US$10mn, with FIMBank and BicBanco each acquiring a 40% stake in the new company, while IFC, the World Bank's private sector investment arm, takes the remaining 20%. FIMBank added that investment could rise to US$25mn as the business develops.
The factoring industry is considered an important financing alternative for SMEs, as it allows smaller companies to overcome capital constraints and take advantage of growth opportunities.
FIMBank provides trade finance and factoring solutions. BicBanco is a midsize bank that specializes in offering corporate lending to the middle market segment.