China Co-Financing Fund for Latin America and the Caribbean provides $25 million loan to Banco Sofisa for on-lending to SMEs

Project narrative

On July 2, 2021, the private sector institution of the Inter-American Development Bank (IDB) Group -- IDB Invest (formerly Inter-American Investment Corporation, or IIC) -- signed a USD $200 million financial package with Banco Sofisa S.A. This financing package included $25 million from the China Co-Financing Fund for Latin America and the Caribbean (CHC), a fund established by the People's Bank of China (PBOC) and managed by IDB Invest. The financing was a credit line with an A/B structure. Along with the co-financing mobilized from the CHC, IDB Invest itself contributed USD $20 million, IDB contributed USD $30 million, Proparco contributed USD $30 million, and FinDev Canada contributed a final USD$20 million to the A-loan. Another $75 million was to be provided by unspecified B-lenders. The A-loan carried a 4 year maturity (final maturity date: May 15, 2025) while the B-loan carried a 2 year maturity. As of February 2025, the full $25 million committed by the CHC had been disbursed. The loan proceeds were to be used by Banco Sofisa to increase lending to small and medium-sized enterprises (SMEs), particularly following the COVID-19 pandemic. The project was part of the 2X Challenge, and as such at least 30% of the credit line was to be used for financing women led or owned SMEs. IDB Invest, Proparco, and FinDev Canada also provided technical assistance to Banco Sofisa to help identify and lend to more sustainable SMEs, as well as increase lending to women led or owned SMEs in their portfolio. In accordance with IDB Invest policy, an Environmental and Social Review was conducted for the project.