PROCREDIT and the development of a green project with CAF’s support

For over six years, CAF, Development Bank of Latin America, has been developing the Environmental Management Plan for Financial Institutions, to promote the internalization of the principles and practices of environmental and social management with the financial sector of the Region. 

In the Program's framework, and with technical assistance resources, CAF provided financial support to Banco Procredit in Ecuador, in order to: 

• Support the identification and application of measures aimed at mitigating the environmental impact resulting from the Bank's own activities, as a corporate environmental responsibility strategy;
• Establish a System for the Analysis of Environmental and Social Risks to allow the Institution to guarantee environmental sustainability and social responsibility in its investments and projects, effectively contributing to the country's sustainable development; and
• Create a green financial product called "Ecocredit", which promotes the financing of entrepreneurial initiatives with ample benefits and minimal environmental risks.                   

In addition, the initiatives significantly contributed to increase the sensitivity of the Bank's staff with respect to the environmental subject. 

• Three hundred staff members from Procredit were trained in the identification and management of environmental risks within the analysis of credit risk, in addition to subjects related with the Bank's internal environmental management, such as waste recycling.   

During the March-October 2012 period, through the ECOCREDIT product, Banco Procredit approved 255 projects for an accumulated value of USD 3.2 million in productive sectors such as food, metallurgical, textile, agricultural, transportation, printing, and technological services.   

The benefits of the product are preferential interest rates, longer terms, flexible guarantees, and flexible procedures. 

Later, creating synergies between the Andean Bio-trade Initiative, a project carried out by CAF jointly with GEF and CORPEI CAPITAL ‒Ecuadorean promotion institution‒ an agreement was signed with Banco Procredit to train its staff in subjects related with Bio-trade, and prepare them for the granting of a line of credit for USD 500,000, aiming at the financing of Bio-trade projects in small and medium-sized companies.   

It is expected that the agreement to grant the line of credit will be signed in November 2013. This line of credit will allow the expansion of the bank's scope, and multiply the positive environmental impacts of the ECOCREDIT green product, while at the same time show the banks in the region the feasibility of financing initiatives for Bio-trade in Latin America and the Caribbean.