IFC Provides $100 Million for Santander to Support Small and Medium Enterprises ...
Brazil, November, 04 2020 -
IFC, a member of the World Bank Group, is providing a $100 million loan (equivalent to BRL560 million) to Santander Brasil to boost access to credit for small and medium-sized enterprises (SMEs).
Half of this financing will be devoted to the commercialization of photovoltaic panels. Of the remaining amount, at least 20 percent will be directed to SMEs owned by women.
The loan is part of IFC’s $8 billion package of fast-track financing to its clients worldwide to mitigate the economic impacts of the COVID-19 pandemic. IFC’s investment consists in a one-year senior loan, which can be renewed once, for additional 12 months. This is Santander’s third transaction with IFC since 2017.
“Financing green credit lines at this moment is essential to support the transition to a cleaner economy, with focus on small businesses and entrepreneurs. In addition to being part of our strategy, it contributes to a virtuous cycle of resumption of the country’s economic activity. This new partnership with IFC allows us to expand our operations on these important fronts of action,” says Franco Fasoli, director of Companies, Governments & Institutions at Santander Brasil.
Santander Brasil is a pioneer in financing solar power generation projects, from large solar plants to the sale of photovoltaic panels to small farmers. The Bank has already made possible the financing of 285 wind farms, which account for 30 percent of the installed capacity of wind energy in Brazil. Santander is also one of the leaders in providing financing to SMEs in Brazil and has recorded a 27.3 percent growth in its loan portfolio to the segment in the last 12 months (until June 2020).
“The COVID-19 pandemic has been affecting economies worldwide, leaving small and medium-sized enterprises particularly vulnerable. That is why, in addition to catalyzing green projects, IFC’s loan will allow Santander Brasil to support small and medium-sized companies, including women-owned businesses, enabling them to continue their businesses and preserve jobs,” says Rogério Santos, IFC’s head of Financial Institutions for Brazil and the Southern Cone.
IFC has invested in Brazil’s private sector since 1957 to address the country’s most critical development challenges, including urbanization, social inclusion, competitiveness and productivity, and management of natural resources. In fiscal year 2020, IFC’s new long-term investments in Brazil, across all sectors, totaled $2.2 billion, including $615 million in third-party resources.
SMEs represent 99 percent of all companies in Brazil, according to Sebrae1. They generate 52 percent of formal jobs and account for 30 percent of the country’s Gross Domestic Product.
The portion of the financing focused on women-owned SMEs (WSMEs) uses resources provided by the Women Entrepreneurs Opportunity Facility (WEOF), a global finance facility dedicated to expanding access to capital for women entrepreneurs. WEOF was launched in 2014 by IFC, through its Banking on Women program, and Goldman Sachs 10,000 Women. IFC’s Banking on Women program provides financing and expertise to an extensive network of financial institutions to help them acquire and expand women-owned SME and retail customers. WEOF has already reached 73,000 women entrepreneurs through its investments and is on track to reach 100,000 women globally.
Charlotte Keenan, Global Head of Goldman Sachs 10,000 Women, said, “WEOF is committed to building the capacity of local banks to mitigate against the disproportionately adverse impact of COVID-19 on women-led businesses. This innovative partnership allows us to support scale of working capital finance for WSMEs in emerging markets to ensure resources for their continued growth through challenging economic times.”