IFC announces US$50 million loan to Caja Arequipa to promote MSMEs in Peru

The International Finance Corporation (IFC), a member of the World Bank Group, announced a loan of US$50 million (equivalent to S/198 million) to Caja Arequipa, a leading financial institution in the municipal savings bank system of Peru, in order to promote the generation of credits for Micro, Small and Medium Enterprises (MSMEs) in the country, with a special focus on the segment of companies led by women.

The loan will benefit more than 20,000 clients of Caja Arequipa in Peru, which will contribute to the development of the most vulnerable sectors of Peru in the context of the economic recovery after the COVID-19 pandemic. The Cajas Municipales de Ahorro y Crédito (CMAC) model has been a success story for microfinance in Peru and is considered a benchmark for microfinance institutions in Latin America and the Caribbean (LAC). CMACs represent around 47.8 percent of the Peruvian microfinance sector and have been essential in providing MSMEs with access to finance.

As part of the financing package, IFC mobilized US$20 million from international impact investors, resulting in one of the largest international loans received by Caja Arequipa. The mobilization of resources through the impact funds of Finance in Motion and ResponsAbility allowed Caja Arequipa to diversify its funding sources and strengthen its capital base.

Elizabeth Martínez Marcano, IFC’s Manager for the Andean Region, stated: “The lack of access to finance is a barrier to inclusive and sustainable growth in Peru, especially for MSMEs. Despite constituting more than 59 percent of total employment in Peru, MSMEs only make up 21 percent of total bank loans. At IFC we are honored to collaborate with Caja Arequipa to help MSMEs and promote growth in the country”.

Manuel Chacaltana Cortez, Central Manager of Finance and Management Control of Caja Arequipa, said: “The risk classifications granted to Caja Arequipa based on our position in the market, profitability adjustment, adequate solvency ratio, portfolio coverage levels moderate and our funding structure, make it possible to obtain this financing that will help us continue transforming lives, being a bank with good corporate governance and social responsibility”.

Microfinance institutions play a critical role in helping MSMEs recover from the pandemic crisis by providing loans at a time when large banks are increasingly focused on lending to larger companies. The financial gap for MSMEs is estimated at US$8 billion, which is equivalent to 4.2 percent of the Gross Domestic Product (GDP).

Access to financial services is key to economic development. Savings, insurance and basic payment services improve livelihoods, increase growth and foster innovation. Through its Financial Institutions Group (FIG), IFC helps increase the availability and affordability of financial services, particularly for MSMEs.