WASHINGTON DC, October 8, 2020 – MIGA, a member of the World Bank Group, has issued a guarantee of US$47.5 million for ten years for a loan being provided to Banco Davivienda S.A. (Davivienda) of Colombia. The MIGA guarantee provides protection to the lender against the risks of Currency Inconvertibitlity and Transfer Restriction.
Davivienda will use this MIGA-backed loan to strengthen its capital base and boost lending to women-owned, micro-, small- and medium-sized enterprises (WSMEs), low-income social housing, and green building projects in Colombia. MIGA’s guarantee will allow Davivienda, a systemically important bank in Colombia, to secure funding at a time when liquidity is especially important to counter the effects of COVID-19. The loan will form part of a broader US$485 million financing package from the International Finance Corporation.
Colombia is being heavily impacted by the COVID-19 pandemic. A reduction in investments, including foreign direct investment (FDI), is affecting the short and medium-term prospects of the economy. The capital provided by this loan will help Davivienda mitigate the adverse effects on its liquidity as a result of the crisis.
“This MIGA-guaranteed loan will help narrow the gender gap between men- and women-owned small and medium-sized enterprises in Colombia,” MIGA Executive Vice President Hiroshi Matano said. “Our support will help Banco Davivienda retain compliance with international banking regulations and provide the lending that Colombians need during this crisis.”
Davivienda is supporting customers impacted by COVID-19 through structural relief measures that include restructuring, term extensions, grace periods, other short-term actions to retail customers, and small and medium-sized enterprises (SMEs), subject to Davivienda’s internal analysis.
Additionally, to support the reactivation of the economy, the bank has reduced some fee charges and is disbursing resources backed by the National Guarantee Fund and second-floor banks to finance SMEs’ working capital and payroll needs and self-employed people.
Efraín Forero, CEO of Banco Davivienda stated, “This operation came at an excellent moment to support our clients and strengthen our sustainability strategy of supporting female entrepreneurship, financing sustainable projects and helping Colombian people fulfill their dreams of owning their home. Also, this credit allows us to strengthen our capital ratios in today’s challenging business environment.”
About Banco Davivienda
At Davivienda we believe in a financial world that simplifies the lives of people, communities, businesses, and cities. As a result, currently we are a team of more than 17.2 thousand people in Colombia, Panama, Costa Rica, Honduras, El Salvador, and Miami, innovating, investing in knowledge, talent, and technology, collaborating and seeking best practices worldwide. We do all of this to deliver day-to-day solutions and exclusive offers to more than 16 million customers, enabling greater financial inclusion and sustainable development. We are currently the second-largest bank by portfolio in Colombia*, with a network of 668 branches and around 2,700 ATMs in Colombia and in our international subsidiaries. We are one of the companies belonging to the Grupo Bolívar.
* Financial Superintendence of Colombia (figures as of June 2020)
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over $59 billion in guarantees across 118 developing countries.
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.
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