The International Finance Corporation (IFC), a member of the World Bank Group, has signed an agreement to endow Banco ADOPEM with 450 million Dominican pesos (approximately 10 million dollars) to promote credit for entrepreneurs. IFC’s support will allow Banco ADOPEM to grant 140,000 new loans in the coming seven years, an increase of almost 70% compared to June 2015. Around two thirds of these loans are destined for women, to allow them to expand and diversify their enterprises.
Access to credit is a key factor in driving economic growth and reducing inequality. Although the Dominican Republic already has several successful microfinance institutions, it still has a significant credit deficit –only 15% of the country’s microentrepreneurs have access to loans.
“We have made great strides in the services we provide our communities. Almost 70% of our customers have access to funding exclusively through Banco ADOPEM, and the average amount of our loans is 480 dollars, the lowest offered by the country’s microfinance institutions”, said Mercedes Canalda de Beras-Goico, executive president of Banco ADOPEM. “There is still a long way to go, but we are very happy to take on these new challenges with the support of IFC”.
IFC was the first international bank to invest in Banco ADOPEM when it became a regulated savings and loan bank. In its capacity as a shareholder, IFC contributed a total of 1.2 million dollars between 2007 and 2015, resulting in approximately 60,000 loans made to Dominican entrepreneurs in those eight years. Since IFC began its participation in ADOPEM, the bank’s loan portfolio and customer base have increased practically fourfold without any loss of quality in its assets. IFC has also provided ADOPEM with technical support, helping it set up a risk management unit, improve its credit processes and increase its operating efficiency. Through this loan, IFC continues supporting ADOPEM’s mission to include Dominican entrepreneurs in the formal financial system.
“ADOPEM’s success can be seen by the thousands of women and men who have succeeded in emerging from poverty thanks to their own efforts. Their small enterprises have a major impact on their families and communities”, said Luc Grillet, senior manager of IFC for the Caribbean and Central America. “ADOPEM has been a key partner for IFC. Our institutions have jointly committed to extending access to credit among entrepreneurs who are working to establish their businesses”.
The loan to ADOPEM is consistent with IFC’s strategy in the Dominican Republic, which is focused on fostering economic growth and creating opportunities for the poorest segments of society. At the end of June 2015, IFC had a total investment portfolio of 198 million dollars, including 22 million dollars from associated institutions. Last year, IFC’s customers in the Dominican Republic supported over 14,000 jobs.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. It works with over 2,000 companies all over the world and uses its capital, specialist knowledge and influence to create opportunities where they are needed most. In 2015 its total long-term investments in developing countries were 18 billion dollars, which allowed the private sector to perform an essential role in the efforts deployed worldwide to put an end to extreme poverty and drive shared prosperity.