New contribution to Latin American microfinance

(Caracas, July 17, 2008).- The Andean Development Corporation approved a US$5-million capital investment in the Spanish Fondo de Inversión Libre BBVA Codespa Microfinanzas in an effort to increase opportunities for Latin American microfinance institutions by giving them the opportunity to access finance in local currency.

CAF President & CEO Enrique García said that "the social problems of access to services such as health, education and financial services can and must be addressed by the private sector; this is why the Corporation supports private business initiatives which contribute to solving social problems as an economically efficient way of achieving economic growth with equity." He added that "the objective of this capital investment is to stimulate development of the Latin American microfinance sector and strengthen the commercial link between our region and Europe."

Currently CAF supports almost 40 institutions which serve microenterprises in 11 Latin American countries with total funds of over US$120 million.

Fondo de Inversión Libre BBVA Codespa Microfinanzas was set up with the objective of contributing to the development of the microfinance industry, through investment in debt instruments issued by Latin American microfinance institutions which demonstrate solidity and viability moving toward sustainability.

The Fund offers financing in local currency, which reduces risk by diversifying investments by term, country and currency; however, finance is also available in securities denominated in euros or US dollars. The support is not only for larger stronger entities but also for smaller ones which need support to continue growing and expanding. The leading promoters of the fund are Banco Bilbao Vizcaya Argentaria, SA (BBVA) and Codespa Foundation.