Chile, CAF shareholder partner

CAF, whose headquarters are in Caracas, Venezuela, is now a modern and prestigious institution in the international financial world, being the second largest multilateral bank of Latin America and the Caribbean.

During its 23 years of existence, CAF has known how to adapt with flexibility to changes in the international system and adapt its operations to the needs of its member countries.

With a versatile and modern concept of the role that a financial of its category should play, CAF is currently operating as a multi-service bank, mainly development, but with active functions as investment and foreign trade bank.

Its main clients include large, medium and small private sector industry, which are served through global credit channeled through a series of public and private financial institutions.

As part of the objective of expanding its radius of action, CAF has undertaken commercial activities in the other Latin American and Caribbean countries, with satisfactory results.

Mexico and Chile have subscribed to CAF series "C" shares of CAF, reserved for extra-subregional countries interested in negotiating with the Andean nations, technology exchange, contributing to the creation of new productive companies, stimulating foreign trade operations, and facilitating participation in other markets.

Additionally, in 1992 CAF President & CEO Enrique García took steps in favor of the entry of Spain as shareholder in this share category and has begun similar contacts with Mercosur member countries, Japan and Switzerland.

With the Caribbean area - especially Trinidad and Tobago, Barbados and Jamaica - productive institutional and commercial contracts have been established in recent months, which have led to joint business between companies established in both areas.

Trade between Chile and the Andean countries To finance foreign trade operations, CAF provides two mechanisms: the Andean Trade Finance System (SAFICO) and the Letters of Credit Confirmation and Finance Mechanism for Imports from Third Countries (MECOFIN).

SAFICO finances exports of member countries between themselves and to third markets, operating mainly by granting loans to importers and paying exporters directly.

Some months ago, CAF granted a US$3 million line of credit to Banco Sud Americano of Chile, to finance operations included in this mechanism with a view to cooperating with Chilean business which wish to import products and services from any Andean country.

The line can be used to finance the FOB value of export of products and services originating in the subregion.

When Andean multinational or national means of transport and insurance companies are used, the finance can be for CIF value.

The minimum amount of each group of operations financed is US$10,000.

By setting up this line of credit, CAF is helping to eliminate one of the obstacles which usually delays commercial transactions, which is access to credit.

In the future, similar agreements are planned with another two Chilean financial institutions.

Additionally, more detailed and up-to-date information is being prepared on investment opportunities, markets, products, customers, availability of transport and distribution channels, as well as Chilean and Andean regulations on exports, in order to foster closer ties between the companies of the six countries.