[China Co-Financing Fund] IDB administers 6 million USD loan from CHC to Ficohsa for SMEs

On 16 December 2016, the Inter-American Investment Corporation (IIC, now IDB Invest) signed a loan package with the Banco Financiera Comercial Hondureña (Ficohsa), through which IDB Invest would provide a 12 million USD subordinated loan with a 10 year term, to be paid in one installment at the end of the term, with a variable interest rate of LIBOR + 7% for the first and last five years. In the same contract, the OPEC Fund for International Development (OFID) provided a 12 million USD subordinated loan to the project as well. For the purposes of this project, the average 6-month LIBOR in December 2016 (the date of signing of the agreement) was 1.306%, so the interest rate has been coded as 8.306%. The China Co-Financing Fund for Latin America and the Caribbean (CHC), according to the project's page on the IDB Invest website and the OPEC Fund website, would provide an additional subordinated loan up to 6 million USD. Banco Fichosa's website also notes the total loan amount agreed upon in December 2016 was 30 million USD (12 million + 12 million + 6 million). However, internal financial documents from Banco Fichosa indicate that only 24 million USD, 12 million from both IDB Invest (IIC) and OFID, were provided as subordinated loans. Although it seems the 6 million USD from the CHC were included in the agreement, it is unclear whether Banco Ficohsa made use of this additional 6 million USD of financing. The funding was intended to help Ficohsa increase access to finance for small and medium enterprises (SMEs) in Honduras, including women-led SMEs. It is hoped that the project will contribute to an estimated 15% growth in Ficohsa's portfolio of SME clients, as well as increase the share of women-led SMEs as part of the total portfolio from 32% today to more than 37% by December 2019. The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella project ID #86526.

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