US$700,000 subordinated loan approved for FFP Ecofuturo

(La Paz, November 4, 2009).- CAF announced the approval of a US$700,000 subordinated loan in favor of Fondo Financiero Privado (FFP) EcoFuturo SA, which the financial institution will use as operating capital for financing undertakings in the micro-, small- and medium-sized enterprise sector (MSMEs).

The loan is part of the support which the multilateral institution offers for strengthening specialized microfinance institutions in Bolivia and is in addition to two subordinated loans of US$5 million each, granted between February and April this year to FFP FIE and Banco Sol.

"The development of microfinance institutions faces, among other obstacles, a scarcity of financing alternatives, so their funding structure includes conventional sources of funds which erode their competitiveness and generate losses in economic and social efficiency in the enterprises," Emilio Uquillas, CAF director representative in Bolivia, said. The subordinated loan granted to Ecofuturo aims to reduce this barrier by offering funds which strengthen the solvency of the institution, and in the long term improve the possibilities of financing its customers.

Fernando Momp�, general manager of FFP Eco Futuro, said the CAF financing would increase the amount of capital of his institution available for granting loans to micro- and small-sized enterprises and strengthen its capacity to opt for additional finance. Finally, he thanked CAF for the confidence placed in his institution and recalled that CAF was founder of Ecofuturo at the time of its regulation ten years ago.

The financial fund has a loan portfolio of over US$90 million, over 44,000 borrowers and 84,000 savers in the 79 agencies spread over eight departments of the country. A characteristic of the institution is its emphasis on providing services in rural areas, while not neglecting urban areas.

With this operation, CAF confirmed its commitment and regional leadership in promoting the microfinance industry. The Corporation currently has 85 ongoing operations of financial assistance to this segment in 14 Latin American countries, with total funds of over US$160 million.