The proposed investment consists of a 5-year A-loan to Sudameris Bank S.A.E.C.A (Sudameris or the Bank) for up to US$75 million, to expand the Bank’s small and medium enterprises (SMEs) lending program, of which at least 30% is expected to be on-lent to Women-Owned SMEs (WSMEs) (the Project).
IFC anticipates that the Project will contribute to narrow the finance gap for SMEs in Paraguay, supporting financial inclusion in the country. The SME finance gap in Paraguay is US$3.9 billion according to the SME Finance Forum, representing approximately 14% of the country's GDP. Informal micro and SME demand for finance is estimated at another US$3.6 billion. Improving access to finance and thus productivity of SMEs is crucial for the development of Paraguay's economy, as SMEs are a key driver of economic growth and job creation. Furthermore, 30% of the proceeds are expected to be used to originate loans to WSME, a key underserved sub-segment in the economy.
The Project will also increase the competitiveness of the SME financing sector by enabling the Bank to expand its operations. Through the Project, the Bank will demonstrate to other players the commercial viability and business opportunity presented by underserved SMEs proven by its growing market share.
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