CAF approves equity ownership in fund to promote SMEs in Mexico

The Andean Development Corporation (CAF) today approved in its CVI board meeting a maximum equity ownership of US$8 million in a fund to promote small- and medium-sized enterprises (SMEs) operating in Mexico.

The executive president of CAF, Enrique García, said this financial operation falls within the strategy of strengthening relations between the CAF and Mexico, a shareholder country of the Corporation. These relations were given a fresh impetus by the meeting in Caracas between Garcia and the Mexican president, Vicente Fox, during the Group of Three summit last April.

The Multinational Industrial Fund (MIF) was set up to support the development of SMEs in Mexico. Its promoters include Nacional Financiera, Sociedad Nacional de Crédito (NAFIN) managed by Wamex S.A de C.V., a company formed especially for the purpose, the Mexican Foreign Trade Bank (Bancomext) and Inter-American Investment Corporation (IIC). The Fund will have an estimated duration ten years.

Through the MIF, long-term capital investments will be made in manufacturing SMEs with growth potential, of both Mexican and foreign origin, which are already in business or are planning to set up in Mexico.

Support for SMEs in the shareholder countries The CAF board also approved the regulations for the operation of the Business Investment and Development Fund (FIDE) for SMEs in the Corporation's shareholder countries.

The FIDE, which was approved last March, will have a capital of US$50 million at the end of three years. CAF’s stake - US$15 million - is equivalent to 30%. The remaining 70% - US$35 billion - comes from other investors, including international and private institutional participation. Planned initial capitalization for the first year is US$8 million from the CAF and US$10 million from third parties.

SMEs that wish to benefit from the Fund must have the potential to make a qualitative leap that transforms them from generators or savers of foreign exchange into competitive companies in the national and international areas. The objective is to assist these companies to integrate into global production chains.