Original disclosure @ IFC website
Updated in EWS Jun 24, 2022
Disclosed by Bank Nov 22, 2021
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The proposed investment consists of an up to five-year financing to Banco Pichincha Ecuador (Pichincha or the Bank), through an up to US$50 million subscription of senior gender bonds for IFC’s own account. The proceeds of the issuance will be used to provide access to finance for women-owned small and medium enterprises (WSMEs) in Ecuador (the Project). The Project will be the first gender bond to be issued by Pichincha.
The Project is expected to have a strong stakeholders impact by aiming to increase access to finance for SMEs and, more specifically, WSMEs. The estimated financing gap for SMEs is US$15.7 billion or 16% of the country's GDP, while the financing gap for WSMEs is US$1.2 billion, which represents 8.1% of the SME finance gap. Moreover, Ecuador ranks 86th on the 2019 Gender Inequality Index, implying that there is still much work to be done to level the playing field and increase access to finance to WSMEs.
Additionally, the Project is expected to have a strong contribution to market creation through inclusiveness, as the Project is anticipated to be the first gender bond issued by the largest bank in Ecuador with a strong SME and WSME business focus and will promote greater market inclusiveness by encouraging other banks to issue thematic bonds of their own focused on supporting WSMEs. With this proposed investment IFC will introduce a gender-themed bond, which is specifically designed to support women-owned small businesses. IFC expects that increased market-wide awareness of this funding method will help demonstrate the commercial viability of financing WSMEs.
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