Federacion de Cajas de Credito y de Bancos de los Trabajadores, Sociedad Cooperativa de Responsabilidad Limitada de Capital Vari
Status: Investment in contracting phaseWhy disclosure?
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In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our prospective customer?
Holding the position as the largest cooperative federation in the country, Fedecredito provides support to its 54 member cooperatives by offering financing, technical support, and advisory services. The member cooperatives, in turn, have been catering to the financial needs of MSMEs and low- to mid-income individuals across both rural and urban areas since 1943. Fedecredito operates under full ownership by its member cooperatives.
What is our funding objective?
FMO will provide a USD 30mln senior secured loan consisting of a USD 20mln committed tranche and a USD 10mln uncommitted tranche. The funds will be on-lend to Fedecredito's member cooperatives to provide loans to microenterprises and underserved SMEs across El Salvador.
Why do we want to fund this investment?
Through the investment, FMO will contribute to reducing inequalities by supporting underserved MSMEs across El Salvador. These make up a majority of economic units in the country but continue to face significant challenges in accessing financial services. Fedecredito is an ideal partner to bridge this gap, thanks to its extensive experience in the sector and its member cooperatives' proximity to the clients. In addition, funding and supporting the cooperative system of Fedecredito will impact the wealth of its large number of shareholders (~1.4mln individuals who are both clients and shareholders of the cooperatives). Consequently, wealth will stay and is re-invested in the country.
What is the Environmental and Social categorization rationale?
E&S Risk Category C. Fedecredito provides loans to its member cooperatives which are (NB)FIs in El Salvador. These in turn on-lend to micro enterprises and SMEs with an average loan size of <10k. Consequently, neither Fedecredito nor its member cooperatives have reported IFC PS Triggered Transactions. The most prominent target sectors have an overall low E&S risk and include Consumer, Services, and Commerce. Given that Fedecredito provides financing to its member cooperatives, the federation also has no direct exposure to high-risk sectors.
More investments
| Date | Total FMO financing |
|---|---|
| 10/15/2024 | USD 24.00 MLN |
- Website customer/investment
- https://www.fedecredito.com.sv/
- Region
- Latin America & The Caribbean
- Country
- El Salvador
- Sector
- Financial Institutions
- Publication date
- 5/23/2024
- Deadline for feedback
- 6/22/2024
- Total FMO financing
- USD 20.00 MLN
- Funding
- FMO NV
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - C