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São Paulo, Brazil, March 2, 2017 - IFC, a member of the World Bank Group, is providing a $250 million financing package for Banco Daycoval, a Brazilian bank specialized in corporate credit, payroll-deductible loan, foreign exchange, and investments, to expand access to finance for small and medium enterprises (SMEs), including women-owned businesses.
IFC's financing consists of a 5-year $63.6 million loan on IFC's own-account and a 2-year syndicated loan composed of two tranches, one denominated in US dollars for $80 million and one denominated in Euros for €55.5 million. It also includes a 5-year $47.7 million loan through the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC's future senior loan portfolio. Of the aggregate $250 million, at least 25% will be allocated towards women-owned SMEs. The remaining resources will be directed to finance Daycoval's lending operations to SMEs countrywide.
Among the 11 banks participating in the syndicated loan, the following five are investing in Daycoval for the first time: Industrial and Commercial Bank of China (ICBC), responsAbility Social Investments AG, Bancaribe, Microvest, and Republic Bank Limited. For responsAbility Social Investments AG, this is also their first investment in Brazil. Other lenders of the syndication are Banco Santander, Standard Chartered Bank, Banco Itaú BBA, Commerzbank, BAC Florida Bank, and UBI Banca.
SMEs play a key role in Brazil's economy as they represent about 99% of the formal enterprises in Brazil, accounting for 52% of the total formal employment and 27% of the country's Gross Domestic Product (GDP). A World Bank Enterprise Survey shows that women-owned businesses represent half of the registered SMEs in Brazil. However, nearly half of these enterprises identify access to, or cost of, finance as a major constraint in operating their businesses, resulting in an estimated $ 45 billion potential credit need.
"Daycoval is pleased with this new investment from IFC, as it will help us expand the reach and improve the result of our work with SMEs, which play an important role in the Brazilian economy," said Ricardo Gelbaum, Daycoval Investor Relations Officer. "There are great growth opportunities for SMEs, and we want to further expand our partnership with this sector throughout Brazil," he added.
"This is the seventh time IFC invests in Banco Daycoval in the last decade. We are very pleased with this new investment, as it will help maximize the reach of our financial support to SMEs, thus contributing to the reduction of the finance gap they face in Brazil," said Marcelo Castellanos, IFC Manager for the Financial Institutions Group, Latin America and the Caribbean. "Daycoval has been a key partner for IFC in supporting our strategy to expand opportunities and financial inclusion in Brazil, helping to foster the country's development", he added.
The loan is linked to the Women Entrepreneurs Opportunity Facility ("WEOF"), a global facility dedicated to expanding access to capital for women entrepreneurs. The WEOF was launched in 2014 as a partnership between IFC's Banking on Women program and the Goldman Sachs 10,000 Women initiative to radically expand access to finance for women-owned businesses. Since then, it has made over $600 million in commitments to financial institutions in 14 countries to spur lending to women entrepreneurs.
"Access to capital is a major obstacle to growth for women entrepreneurs," said Lisa MacDougall, Vice President and Global Head of Goldman Sachs 10,000 Women. "Goldman Sachs research shows that closing this gender credit gap could increase per capita income by around 12% in emerging markets by 2030. This commitment to Daycoval will place more capital in the hands of women entrepreneurs in Brazil who will drive future economic growth and job creation."
IFC's Banking on Women program is playing a catalytic role in helping financial institutions meet the needs of women entrepreneurs in a sustainable and profitable way. The program has committed 41 investments globally, totaling around $1.3 billion, and undertaken 31 advisory projects since its launch in 2010.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it's needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
Banco Daycoval is a Brazilian bank specialized in corporate credit, payroll-deductible loan, foreign exchange, and investments. For the full-year ended 2016, Daycoval's main financial figures were: Expanded Loan Portfolio of BRL 14.3 billion, Total Assets of BRL 21.7 billion, and Net Income of BRL 406.9 million. Its network includes more than 145 points of distribution in Brazil: 39 market branches, 38 Daycred stores/IFP, 32 exchange bureaus/correspondents and 37 Daypag offices. More information, visit www.daycoval.com.br/ri
About Goldman Sachs 10,000 Women
The Goldman Sachs 10,000 Women initiative is a campaign to foster economic growth by providing women entrepreneurs around the world with a business and management education and access to capital. The initiative has reached women from across 56 countries through a network of 100 academic, nonprofit, and bank partners. In partnership with IFC, Goldman Sachs 10,000 Women launched a first of its kind global finance facility in 2014 to enable 100,000 women entrepreneurs to access capital.