IFC, a member of the World Bank Group, is providing a five-year US$100 million loan to help Banco Continental S.A.E.C.A expand its lending program to small and medium enterprises (SMEs) and agribusiness companies, helping to increase job creation and economic growth in Paraguay.
SMEs play a central role in creating a dynamic, competitive and inclusive economy. In spite of that, around 20% of SMEs in Paraguay are either unserved or underserved in terms of financial products. The agribusiness sector accounts for over 22% of Paraguays GDP, 65% of its exports and over 19% of its labor force. Improving access to finance and strengthening the competitiveness of both SMEs and agribusiness sectors is thus critical for Paraguays economic development. IFCs investment in Banco Continental will help close the financing gap in those sectors.
With IFCs financing, Banco Continental will be able to provide its clients with funding at longer maturities and more appropriate structures, helping them to enhance productivity and grow. This is IFCs fourth investment in Banco Continental. IFC and Continental have been working together in Paraguay since 2008, when the bank joined IFC’s Global Trade Finance Program. In addition, IFC is currently working with Continental on an advisory services initiative to support the bank in its digital transformation.
IFCs investment in Continental will help to reinforce our presence in two segments that are crucial for Paraguay, said Teresa Gaona, board member of Continental. This loan demonstrates IFCs confidence in our capacity to lend to agribusiness companies and SMEs, which are very important in our business strategy.
Continental is the largest bank in Paraguay in terms of loans and assets, offering financial products and services for SMEs, corporates and individuals, with SMEs and corporates as its main segments.
IFC is pleased with this long-term partnership with Continental, said Marcelo Castellanos, IFC Regional Industry Manager. Through this new investment, Continental will be able to extend the tenor of its lending to SMEs and agribusiness companies, which is key to allow them to plan, grow and hire new employees, he added.
In the past three fiscal years, IFC has committed approximately $6 billion in the financial sector in the Latin America and the Caribbean region, in long-term investments, including mobilization. This financing to Banco Continental is part of IFCs strategic focus on supporting local financial markets to achieve development impact.
IFCs strategy in Paraguay seeks to strengthen the countrys competitiveness by providing financial products and advisory services in key economic sectors, focusing on improving physical and digital connectivity to boost export-led growth and economic diversification, managing natural capital to integrate the agricultural and beef sectors into sustainable value chains and increasing access to finance for SMEs to support the creation of more and better jobs.
IFCa sister organization of the World Bank and member of the World Bank Groupis the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.
About Banco Continental
Continental is a locally-owned commercial bank headquartered in Asuncion that was established in 1980. As of March 2019, Continental was the largest bank in Paraguay in terms of loans, assets and net worth. The bank is focused on SME financing with a significant presence in the agribusiness segment and employs nearly 1,236 staff with 64 branches across the country.