New program to support microfinance institutions in Bolivia

(La Paz, August 12, 2010) .– CAF today announced implementation of a new financing instrument for the micro-, small- and medium-sized enterprise (MSME) sector in Bolivia for Bs.35 million which the Latin American development bank will use to support microfinance institutions in Bolivia through medium term loans in local currency.

The program addresses the borrowing needs of this sector, which traditionally has limitations in accessing credit, by providing loans in local currency which eliminate exchange risk. Under the financing facility, CAF clients will be able to access medium-term credit (up to three years) in bolivianos, with semi-annual repayments at competitive rates.

"For CAF, as an innovative and versatile institution, it is essential to structure initiatives tailored to the needs of different sectors and in favor of Latin American development. This program provides another alternative for microfinance institutions, which may apply for loans in dollars and in local currency," CAF director representative in Bolivia Emilio Uquillas said.

The new facility which CAF is offering for the first time in Bolivia is part of a local currency program that has been successfully implemented by the institution in Peru for US$34 million, Mexico US$10 million, and Colombia US$20 million.

This innovation expands CAF’s already extensive range of financial products offered in Bolivia and continues its support for microfinance institutions which have the capacity to make a significant impact on the most vulnerable sectors of the population.