The Inter-American Development Bank (IADB) has completed a US$15mn loan facility for Latin America Export Finance Fund Ltd that will support the growth of Latin American exporters.
The fund, which provides export finance loans to Latin American companies, is managed by Crecera Finance Company, a US firm with local partnerships throughout the region.
The Netherlands Development Finance Company (FMO) is a co-lender, also providing US$15mn to the fund, for a total loan package of US$30mn. The loan is matched by the fund’s existing equity base of US investors, increasing the total size of the fund to over US$60mn.
The fund seeks to establish long-term relationships with regional exporters and serve as a stable and reliable source of financing. The fund provides loans using a variety of structures to enable local companies to increase exports. The fund currently has operations in Argentina, Brazil and Peru, and will expand to other countries in the region.
The facility is expected to stimulate exports from small and medium-sized companies, a sector that has been negatively affected by the macroeconomic crises in the region during the past several years. While the situation has improved today, there are still large numbers of exporters that do not have access to the necessary financing support from local and international banks, and the fund fills this need in the market.
Latin American exporters supported in this facility range in size from US$10mn to over US$150mn in annual exports.
The project is consistent with IADB’s strategy for supporting the recovery of regional export competitiveness and promoting productive investment, economic growth and job creation. It also provides a new way to leverage US and international private investment into trade, an important financing category in Latin America. The key objective is to achieve sustained export-led growth driven by the strengthening of small and medium-sized enterprises.