Asunción, Paraguay, The International Finance Corporation (IFC), the largest global development institution focused on the private sector in emerging markets, announced a new loan of up to $75 million in Sudameris Bank S.A.E.C.A (Sudameris), one of the leading firms in the Paraguayan financial sector. The loan will increase access to finance for small and medium enterprises (SMEs) in Paraguay, which in turn will have a positive impact on job creation and the economic recovery from the effects caused by the COVID-19 pandemic and climate change. Additionally, a trade line for up to $25 million was reinstated.
SMEs play a central role in the creation of dynamic, competitive, and inclusive economies, and are also important sources of net job growth in emerging markets. However, the formal SME finance gap is about $4 billion in Paraguay, with around 20 percent of SMEs not having sufficient access to financial products. IFC and Sudameris will help close the financing gap for this key segment.
IFC’s support to Sudameris also includes a gender focus, allocating 30 percent of loan resources to women-owned SMEs, which represent almost a fifth of all SMEs in the country. With this commitment, the bank is expected to increase its portfolio of women-led SMEs, demonstrating the business opportunities presented by underserved sectors.
“With this financing, IFC continues to reinforce its commitment to the sustainable development of Paraguay,” said David Tinel, IFC’s regional manager for the Southern Cone. “This operation is well aligned with IFC’s strategy, which is focused on supporting more sustainable and inclusive growth through greater access to credit for SMEs, and especially for those led by women, by working with solid financial institutions.”
“IFC seeks to generate long-term partners to promote and achieve its mission. This loan builds on IFC’s strategic relationship with Sudameris, granting a long-term loan to promote access to credit for SMEs, with the aim of continuing to work together in the future,” said Marcelo Castellanos, IFC Regional Industry Manager.
Conor McEnroy, president of Banco Sudameris, highlighted that the institution’s strategy positions it in an excellent place to demonstrate the commercial viability of serving the SME segment in Paraguay, which has suffered a considerable contraction due to the COVID-19 pandemic. “This commitment with IFC will allow Sudameris to continue expanding its operations and increase its participation in the SME financing market, helping to reduce inequality in access to credit and promoting greater competitiveness of SMEs as key drivers of the Paraguayan economy.”