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BANFONDESA: supporting the growth of MSMEs in the Dominican Republic
Project
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Signature date
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Location
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Dominican Republic
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Financing tool
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Financing amount (Euro)
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5000000
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Financing details
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EURIZ portfolio guarantee of 344,181,100.00 Dominican Peso (DOP)
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Customer
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BANFONDESA
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Type of customer
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Financial institution
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Project number
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CDO1086
This project is carried out with the support of the European Union and Organization of African, Caribbean and Pacific States (OACPS).
The content of this project information sheet falls under the sole responsibility of the Proparco and does not necessarily reflect the opinions of the European Union and the ACP Group. This information is given at the time of signature, without prejudice to any developments in the operation/project.
Proparco has allocated a EURIZ portfolio guarantee to BANFONDESA, a financial institution in the Dominican Republic, to allow it to develop its activity for microenterprises and small and medium-sized enterprises (MSMEs) in the country.
Client presentation
Banco de Ahorro y Crédito (BANFONDESA) is the leading bank in financing agricultural microenterprises. It serves a client base mainly made up of micro-entrepreneurs and low-income families. BANFONDESA is regarded as the 3rd largest microfinance institution in the Dominican Republic. It is the banking subsidiary of the non-profit foundation FONDESA, which AFD Group has been supporting since 2013 for its activity for student loans and financing rural micro-entrepreneurs.
Project description
The operation signed between Proparco and BANFONDESA involves a EURIZ portfolio guarantee allocated in Dominican peso (DOP) and equivalent to EUR 5m. This risk-sharing tool will cover 70% of the eligible loans allocated to Dominican MSMEs by the bank. It will thereby guarantee EUR 7.14m of loans granted by the bank.
The portfolio guarantee will be combined with technical assistance which will aim to increase the bank’s capacity for MSME financing, agricultural financing and green housing financing.
Project impact
This operation aims to support the growth of microenterprises and SMEs in the Dominican Republic, especially young start-ups and green MSMEs owned by women, the under 25s and those operating in the agriculture, health, education and digital sectors.
A total of some 150 MSMEs should be supported by this guarantee and some 450 jobs supported over the next few years.