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EQUATEUR
Produbanco is a bank specialized in corporate loans, especially for SMEs. This USD 40m of financing will be partly earmarked to support SMEs, the main creators of jobs and growth in Ecuador, but which have the most difficulties obtaining bank financing.
Client presentation

Produbanco is the 3rd largest player in Ecuador’s banking sector. The bank is part of the regional group Promerica Financial Corporation (PFC), which is based in Panama and present in 9 Latin American countries. This Group, which Proparco has had dealings with since 2013, is a strategic partner due to its regional presence, its specialization in corporate loans (especially for SMEs) and its ability to develop its activity respecting best practices, in particular environmental and social practices. 

Project description

The project involves a Tier 2 subordinated credit line (USD 15m) and a senior credit line (USD 25m) to Produbanco, i.e. a total amount of USD 40m. This financing is part of a total loan amount of USD 70m, in partnership with DEG, and has been syndicated by Proparco under the Friendship Facility. 
The senior credit line is earmarked to finance SMEs, a client segment which the bank wishes to develop further. SMEs are the main drivers of employment and growth in Ecuador, but are also the entities which find it hardest to obtain bank financing. The Tier 2 credit line will also allow the bank to strengthen its regulatory capital.

Project impact

The project will support the bank’s strong growth and the development of its SME activities, which account for 24% of the bank’s outstanding loans (some 25,600 SMEs financed). 

The bank has a nationwide presence, through its 104 branches, including in the most remote rural areas. It thereby contributes to the financial inclusion of the most disadvantaged or unbanked populations (which account for 54% of the population).

Finally, the project will contribute to SDG 8 (Decent Work and Economic Growth). Indeed, the growth in the activity related to PROPARCO’s capital contribution is expected to contribute to creating over 1,300 new jobs. Furthermore, it is estimated that the project will help create 4,600 jobs among the bank’s clients. 

12/12/2018
Date of signature of the project
Ecuador
Location
Financing tool
35 354 428 Euros
Amount of funding
USD 40m loan
Financing details
Banco de la Producción, S.A. y Subsidiarias
Client
CES