Today, in this capital city, Inter-American Development Bank and the BBVA Microfinance Foundation authorities signed a memorandum of understanding in order to cooperate in activities for expanding access to microfinance services in Latin America.
The document was signed by the president of the IDB, Luis Alberto Moreno, and the president of the BBVA Foundation for Microfinance, Manuel Méndez del Río, at a ceremony held in the framework of the 10th Microenterprise Forum.
“The decision by a major international bank such as the BBVA to create a foundation devoted to microfinance demonstrates the transformation which this industry is undergoing in order to reach millions of Latin Americans who still lack access to formal financial services“, Moreno remarked. “And the fact that it is doing so through a non-profit institution underlines its commitment to the social objectives which have always inspired the players in this sector“.
Luis Alberto Moreno, President of the IDB, with Manuel Méndez del Río
On his part, Méndez del Río added: “For the BBVA Foundation for Microfinance this agreement with the IDB has great significance. We are going to work together in order to further the economic and social development of the most disadvantaged, we will join forces with the leader in the development of microfinance in Latin America, by contributing resources and our 150 years of banking experience, to make financial services accessible to the region’s most needy segments”.
Under the agreement signed in San Salvador, the IDB and the BBVA Foundation for Microfinance will be able to collaborate in projects for furthering the microfinance industry overall, as well as to provide support to microfinance institutions in order to facilitate the expansion of their activities. This support may consist of the financing of debt or capital investment or technical assistance.
Likewise, they will be able to development open technological platforms in order to improve the risk management of the credit portfolios of microfinance institutions. At the same time, with respect to corporate good governance principles, the IDB and the Fundación BBVA will promote the adoption of best practices among the institutions in the sector.
In addition, the IDB and the Foundation look forward to supporting the training of personnel for the microfinance institutions, by working with universities and business schools in the region and through the development of training courses and study grant programmes.
Moreover, they propose to collaborate with the region’s financial supervisory bodies in order to propose improvements in the regulatory frameworks of the microfinance industry which would facilitate the expansion of its services.
The IDB has been the principal source of financing for the development of microfinance in Latin America and the Caribbean, where in the last 30 years it has invested more than 1,000 million dollars in more than 500 projects associated with microcompanies. Through its Multilateral Investment Fund, since 1992 the IDB has backed the pioneer microfinance networks in the region.
The BBVA Foundation for Microfinance was created this year by BBVA, an institution of Spanish origin which comprises one of the major international financial groups, with a banking presence in 10 Latin American countries. The Foundation has a fund of 200 million euros (approximately 280 million dollars) in order to create a global microfinance network.
The first Latin American institutions incorporated into the Foundation’s network are the Corporación Mundial de la Mujer- Colombia and Corporación Mundial de la Mujer- Medellín in Colombia and Caja Nor-Perú and Caja Sur in Peru.