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Supporting SMEs and the climate projects of BPGT

Project

Financial services
Signature date
Location
Guatemala
Financing tool
Loan
Financing amount (Euro)
24521824
Financing details
USD 25m loan
Customer
Banco Promerica S.A.
Type of customer
Financial institution
Country of headquarters
Guatemala
Project number
PGT1010
Environmental and social ranking
IF-B
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This information is given at the time of signature, without prejudice to any developments in the operation/project.

Through a new partnership with Banco Promerica Guatemala (BPGT), Proparco is contributing to financing local SMEs and renewable energy projects and to supporting employment in the country.

Client presentation

Bancasol was set up in 1995 by a group of industrialists as a private corporate bank. It was taken over in 2007 by Promerica Group, in full regional expansion at the time, and became Banco Promerica Guatemala (BPGT). 

Since 2016, following the acquisition of the assets of Citibank in Guatemala, BPGT has been the leader in the retail banking services segment. However, in keeping with its original scope, the bank is seeking to remain active in the allocation of business loans (39% of the portfolio). BPGT is one of the most profitable entities of Promerica Group (14% of assets and 39.6% of net income), which makes it a strategic subsidiary. With total assets of USD 2.5bn in 2021, BPGT remains a medium-sized bank, the seventh largest in the country. It is very active in the provision of consumer loans and credit cards (these two activities account for 58% of its portfolio). This allows it to generate a profitability above the average in the sector, but exposes it to riskier segments.

Project description

The project involves a senior credit line to Banco Promerica Guatemala (BPGT) for USD 55m with a 7-year maturity (including a 2-year grace period), under the Friendship Facility with DEG as lead arranger. 

This credit line is Proparco’s second operation with BPGT, following a participation in 2018 in a USD 60m credit line (USD 30m Tier 2 subordinated credit line and USD 30m senior credit line to support its SME financing activity), under the Friendship Facility with DEG as lead arranger. 

This new operation will be dedicated to financing the bank’s SME clients and renewable energy and energy efficiency projects.

Project impact

The project should generate the following impacts in Guatemala:

  • Support for the economic development of the country through the increase in financing for the SME clients of BPGT, whose portfolio currently does not serve these companies very much while they employ 85% of the working population. However, it does have the ambition and means to significantly develop this activity;
  • Contribution to financing renewable energy and energy efficiency projects;
  • Support for employment, with 1,415 jobs maintained and 5 jobs created through Proparco’s credit line (support for some 27 SMEs);
  • Mobilization of EUR 55.18m of private finance (ratio of 2.5). 

This operation will support BPGT’s efforts to develop its range of “climate” products. It is the first Guatemalan financial institution to propose “green credit lines”. 

The project will contribute to the achievement of SDG 7 (Affordable and clean energy), SDG 8 (Decent work and economic growth), SDG 9 (Industry, Innovation and Infrastructure) SDG 13 (Climate action).

Banco Promerica Guatemala 2018 2019