SOUTH AMERICA – IDB Invest approved financing of up to $30 million to Eurocapital S.A. to support the growth of its financing portfolios for small and medium-sized enterprises (SMEs) in Chile, Peru and Colombia. This project seeks to strengthen access to financial resources for SMEs in the region, promoting their expansion and sustainability. This is the first regional, multi-product and multi-currency transaction with a non-bank financial institution, promoting the internationalization of the company and helping it to enter global markets.
The financing includes a loan for up to $25 million for Eurocapital Chile, for two years, renewable for a period of up to six years, of which $15 million will be financed by IDB Invest and the remaining $10 million by institutional investors. The loan will be used for factoring and financial leasing operations in Chile, and will also be extended to factoring operations in Peru. In addition, IDB Invest has structured a revolving credit line in local currency of up to $5 million for Eurocapital Colombia, aimed at promoting financing for SMEs in that country.
These funds will allow Eurocapital S.A. to expand its financing offering, promoting the growth of SMEs in key sectors of the economy. With this deal, IDB Invest reaffirms its commitment to supporting the development of SMEs in Latin America and the Caribbean, contributing to job creation and inclusive and sustainable economic growth in the region.
Micro, small and medium-sized enterprises (MSMEs) in Latin America, which represent more than 98 percent of companies, face difficulties in accessing credit. To improve their competitiveness, financing alternatives such as factoring and financial leasing have been promoted. Factoring allows SMEs to obtain immediate liquidity by selling their accounts receivable, while financial leasing facilitates their access to capital goods without large initial outlays, improving their competitiveness with flexible payment options and tax advantages.
IDB Invest will also provide advisory services to Eurocapital S.A. to strengthen its sustainability strategy in its SME portfolio, promoting the identification and development of green and social products by creating a sustainable taxonomy and strengthening capacities through workshops and training; and conducting a diagnosis according to the Women’s Empowerment Principles (WEPs) and thus co-creating an action plan to reduce gender gaps.
Diego Flaiban, managing director of the financial sector division (a.i.) of IDB Invest, stated:
“This new alliance with Eurocapital will allow us to continue supporting the financing of SMEs, through key financial products such as factoring and financial leasing, while promoting the internationalization of the company in Peru and Colombia.”
These actions foster economic growth, generate employment and increase the competitiveness of Chilean companies at a global level.
Luis Pollarolo, CFO of Eurocapital S.A., commented:
“We are grateful for the opportunity and trust that IDB Invest has once again given us, an entity with which Eurocapital S.A. has been working for more than 17 years, to achieve our medium and long-term growth objectives, both in Chile and in Latin America. This support from IDB Invest represents a key opportunity to consolidate our presence in new markets and continue to promote innovation and growth of SMEs in the region. We are committed to offering flexible solutions that adapt to the needs of our clients, which will allow them to face market challenges and continue to grow sustainably.”
The deal is expected to contribute to the following United Nations Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), and Partnerships for the Goals (SDG 17).
