Banco de Ahorro y Crédito BANFONDESA) is the third largest microfinance institution in the Dominican Republic, leader in the financing of agricultural VSEs and serving a clientele mainly composed of micro-entrepreneurs and low-income families.
BANFONDESA is the banking subsidiary of the non-profit foundation FONDESA, which AFD Group has been supporting since 2013 in its student loan activity and the financing of rural microentrepreneurs.
Granting of a EURIZ portfolio guarantee
Launched in May 2019, the EURIZ guarantee proposed by AFD Group with the support of the European Union and the African, Caribbean and Pacific Group of States (ACP Group) enables financial institutions to partially cover their credit risk for loans to MSMEs in sectors with a high development impact.
The operation signed between Proparco and BANFONDESA consists of a EURIZ portfolio guarantee granted in Dominican peso (DOP) and equivalent to €5 million. This risk-sharing tool covering 70% of eligible loans granted by the bank to Dominican MSMEs will guarantee €7.14m of loans granted by the bank.
The portfolio guarantee will be accompanied by technical support aimed at strengthening the bank's capacity to finance MSMEs, agriculture and green housing
A major impact for the Dominican economy
This operation aims to support the growth of VSEs and SMEs in the Dominican Republic, particularly young green start-ups and SMEs, SMEs owned by women or young people under 25 years old and SMEs active in the agricultural, health, education and digital sectors.
In total, nearly 150 MSMEs should be supported through this guarantee and nearly 450 jobs supported over the next few years.