Approval of operations to strengthen microfinance sector in Bolivia

(La Paz, March 11, 2008).- The Andean Development Corporation today announced approval of credit operations to strengthen the micro and small enterprise sector in Bolivia. The funds will be channeled through five microfinance institutions: Banco Solidario, Fondos Financieros Privados (FFP) Fassil SA, EcoFuturo SA, and FIE SA, together with the Jesús de Nazareno Ltda cooperative.

"Approval of these operations in Bolivia is part of the support and strengthening which CAF provides for micro and small enterprises to promote equitable economic growth, through generation of access to productive capital for sectors such as small enterprises, and their inclusion in the traditional financial systems," CAF President & CEO Enrique García said, emphasizing the world leadership of the country in this area.

CAF approved an additional US$9.1 million for the microfinance sector, which brings total financing from the multilateral organization for this segment to over US$31 million through seven specialized financial institutions.

BancoSol will receive a US$5 million subordinated loan to consolidate and reinforce its market position, increase technical capital and leverage expansion over the next few years. The loan is additional to the existing line of credit with the bank.

CAF also approved a partial guarantee for FFF FIE SA for issue of debt bonds on the Bolivian stock market for US$2.4 million. This will be the second incursion of a microfinance institution on the national stock market.

A subordinated loan for US$700,000 was also approved for FFP Eco Futuro SA for capital strengthening and portfolio expansion to reinforce its position and consolidation in the sector.

Lastly, financing operations were approved for FFP Fassill SA and Cooperativa de Ahorro y Crédito Jesús Nazareno Ltda., in both cases for US$500,000. With the financing for Fassill, CAF provides support for expansion and diversification of its sources of financing after the institution markedly improved its performance and financial indicators last year. In the case of the Jesús Nazareno cooperative, the Corporation is giving effective support to the Bolivian cooperative sector which plays a very important role in promoting microfinance in the eastern region of the country.