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Synthetic senior loan in local currency (DOP) to finance the commercial/business loans of the microfinance institution Banco de Ahorro y Crédito Fondesa SA ("Banfondesa") in the Dominican Republic. This operation is financed in local currency as the current regulation in the Dominican Republic authorises the Banco de Ahorro y Crédito to operate only in local currency.
This synthetic senior loan in local currency (DOP) aims at supporting microfinance activities of Banfondesa in the Dominican Republic and promoting access to finance for micro/small enterprises specifically targeting women, youth, and poor populations living in remote areas.
The EIB plays a significant role in establishing a track-record of financing long and medium term microfinance providers in the Caribbean region, as well as contributing to the capacity building of financial intermediaries and eligible final beneficiaries. The proposed operation is a senior loan in local currency to finance the business loans of micro-and small enterprises (MSEs) through the microfinance institution Banco de Ahorro y Crédito Fondesa SA in Dominican Republic. This includes the smaller and less mature enterprises, which would not be eligible for direct EIB funding. By doing so, the operation addresses a relevant market gap, namely that of asymmetry of information which is a prominent obstacle to access to finance that MSEs are confronted with when applying for funding. This funding will enable them to accumulate savings, take benefit of economic opportunities, and manage payments and cash flows, thus helping disadvantaged populations to acquire assets, build financial security and consequently promise to reduce poverty. Therefore, by promoting MSE finance and private secotr development it is well aligned with national and EU priorities highlighted in the National Development Strategy 2010-302, the DR's Multi-annual Indicative Programme 2021-2027, the Neighbourhood, Development and International Cooperation Instrument (NDICI) Geographic and Thematic Pillars, and Team Europe.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
The proposed operation is expected to fall under the NDICI-GLOBAL EUROPE Dedicated Investment Window 4.