Strengthening the Latin American microfinance system

(Paris, February 12, 2007). The International Finance Corporation (IFC) and the Andean Development Corporation (CAF) confirmed their investment in MicroCred Mexico on January 26, 2007. IFC acquired a 15% interest in the capital of MicroCred Mexico while CAF took 9%. The new investors join MicroCred S.A., PlaNet Finance México, and the Mexican Protama Investment Fund.

Through its equity interest in MicroCred S.A., IFC strengthens its social commitment and participates in improving the quality of life of vulnerable sectors of the population. The CAF investment in MicroCred Mexico is perfectly in line with its work of expanding access by microenterprises to products and financial services, as a means of reducing poverty and inequality in Latin America.

Sergio Arenas, director general of MicroCred Mexico, is pleased with the growth of MicroCred, which, he said, had been constant since the first loan granted in February 2006. After nine months of activity, MicroCred had benefited 2,796 active clients and granted 3,700 loans. "The IFC and CAF investments will give us the means to achieve our objectives in the region and benefit our small businesses," Arenas said.

CAF president & CEO Enrique Garcia said that "this is one of the multilateral financial organization’s efforts to strengthen the Latin American microfinance system, contributing to the development and integration of the region's financial markets and strengthening one of the most dynamic and strategic sectors of its shareholder countries."

After beginning with one branch in February 2006, MicroCred Mexico now has six branches in five cities in Vera Cruz state. The finance institution plans to open three new branches in the state, promoting development in the region.

Sister institutions of MicroCred Mexico and MicroCred Madagascar (the group’s second institution) are planned for China, Senegal and North Africa in early 2007. The MicroCred Group is considering opening at least six institutions in 2007 to develop access to financing by microenterprises.

About the International Financial Corporation The International Financial Corporation (IFC) is a member of the World Bank group, created in 1956. Its mission is to promote viable investment in the private sector in emerging markets, with the aim of reducing poverty and improving the living conditions of the poorest sectors. IFC finances investments in the private sector in countries in transition and emerging countries, mobilizes capital on international financial markets, helps its clients improve their social and environmental conditions, and provides technical assistance and advice to governments and companies. www.ifc.org

About MicroCred MicroCred is an investment company whose objective is to constitute a group of microfinance companies and banks. MicroCred is developing an innovative model which gives microenterprises, excluded from the traditional banking system, access to financial services. The company is planning to create or acquire equity in 15 microfinance companies and/or banks between now and 2011. PlaNet Finance, Société Genérale, Axa Belgium and International Financial Corporation (World Bank subsidiary), are part of the founding shareholders of the MicroCred holding.