IDB approves US$50 million for Ecuador’s Banco Pichincha

Support for expansion of financing for housing and small businesses The Inter-American Development Bank today announced the approval of a six-year US$50 million loan to Banco Pichincha, Ecuador’s leading commercial bank, to expand financing for housing, small businesses and microenterprises.

The non-sovereign guarantee operation will help Banco Pichincha diversify the sources and extend the maturity of its funding. The IDB loan may be complemented with a syndicated loan of up to US$25 million, providing the Ecuadorean bank greater access to international financial markets.

Banco Pichincha has a network of 279 branches and more than 600 ATMs across Ecuador. At the end of last year its loan portfolio represented 28% of loans outstanding in the Ecuadorean financial system.v

“We’re pleased to be the first Ecuadorean financial institution to take advantage of the IDB’s new financing scheme for the private sector,” said Banco Pichincha General Manager Fernando Pozo. “This operation will help us pursue one of our strategic goals, to bring new and better products to lower income groups who have traditionally had less access to formal financial services.”

In addition to the loan approved today, the IDB’s Multilateral Investment Fund may provide up to US$500,000 for a project to improve Banco Pichincha’s methodologies and technologies to serve small businesses, building on its successful experience with microfinance.

Banco Pichincha has done other operations with the IDB Group. In 2006 the IDB approved a US$30 million line of credit under its Trade Financing Facilitation Program and in 2007 the Inter-American Investment Corporation approved a US$5 million loan for credit for small- and medium-size businesses.