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Banco de Comercio Exterior de Colombia S.A.

$400 million
Financial Markets
Project Brief

Project Summary

On June 30 2020, The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, has issued guarantees on a two-year USD 400 million loan provided by JPMorgan Chase Bank, N.A, Banco Santander, S.A. and Banco Bilbao Vizcaya Argentaria S.A. (BBVA) – Milan Branch to Banco de Comercio Exterior de Colombia S.A. (Bancoldex) of Colombia. The guarantee will protect the lenders against the risk of Non-Honoring of Financial Obligations by a State-Owned Enterprise (NHFO-SOE).

The MIGA-guaranteed loan will support the liquidity of MSMEs and corporates to help mitigate the expected adverse impacts of the COVID-19. Specifically, The MIGA guaranteed loan will be used to fund programs, such as “Colombia Responde” and “Colombia Responde para Todos”, among others, which provide short-term working capital loans to Corporates and Micro, Small and Medium Enterprises (MSMESs) through financial intermediaries.

Environmental Categorization.

The Project provides financing to loans in response to the COVID-19 crises encompassing working capital loans up to 36 months, capped at US$750,000 for MSMEs and US$1.2 million for Corporates. Given that the targeted use of proceeds are expected to have low to moderate Environmental and Social (E&S) risks, this Project has been categorized as FI-2 according to MIGA’s Policy on Environmental and Social Sustainability (2013)

Development Impact.

The Project supports the liquidity of MSMEs and Corporates to help mitigate the expected adverse impacts of the COVID-19 crisis to the broader economy by increasing their resiliency and helping preserve employment. The Project could have significant positive effects on Colombian MSMEs which contribute approximately 40 percent of GDP and generate about 80 percent of the employment in the country. The MIGA guaranteed loan supports Bancoldex’ s capacity to continue providing liquidity at concessional rates to commercial banks which on-lend to MSMEs and Corporates in key economic sectors during the COVID-19 health crisis. By contributing with timely credit lines to commercial banks in a context of liquidity shortages, Bancoldex might have helped avoid disruptions in the availability of credit to MSMEs which could have experienced limited access to credit and financial stress as a result of the COVID-19 health pandemic.