The Inter-American Development Bank (IADB) has approved a US$15mn loan to Crecera Finance Company, a regional trade finance fund, to provide pre-export and post-export financing to medium-sized exporters in Latin America.
The Netherlands Development Finance Company (FMO) is a co-lender of US$15mn to the fund, while Crecera is contributing US$30mn in equity.
The fund is designed to support the export-driven economic reactivation of Latin America, where many exporters have experienced funding gaps in their operations.
The project will help catalyse the entry of more private equity investors and private lenders in the field of export financing and enable the fund to expand in Latin America.
The IADB loan is part of the bank’s international trade finance reactivation programme, approved by the board of executive directors in March of 2003.
In a previous operation under this programme, Banco Bradesco of Brazil received a US$110mn loan last year.
The loan to Crecera is the first regional project of the trade finance reactivation programme. It introduces a new source of funds for trade finance in Latin America, namely, long-term direct private equity. As such, Crecera complements financial services provided traditionally by the banking sector and benefits a selective niche of medium-sized export companies. The project is expected to have a significant demonstration impact to attract more private equity to trade financing in Latin America and the Caribbean.