Small and medium enterprises in Central America, the Dominican Republic, and Colombia will have improved access to finance given a $15m investment by the International Finance Corporation.
The investment, ‘Central American Investment Fund for Small and Medium Enterprises,’ is part of IFC’s SME ventures programme, which aims to support entrepreneurs and fund managers in the world’s most challenging markets.
Administered by Lafise Investment Management, the fund will enable IFC to provide capital to about a dozen firms in the agribusiness, food and beverage, manufacturing, and telecommunications sectors.
“At least half of the funds are directed to SMEs and close to 25 per cent will focus on companies operating in Nicaragua and Honduras, where the private capital gap is generally wider,” said IFC.
Chief Executive Officer of Lafise, Erick Lagos, commented, “IFC’s participation in this fund is a recognition of our integrity and the impact of our investments on the well-being of countries.
“Working with IFC will strengthen the corporate governance, and environmental and social practices of the companies we invest in, raising business standards.”
Meanwhile, IFC’s Manager for Central America, Sanaa Abouzaid, pointed out, “IFC’s investment aims to meet the financing needs of SMEs in the region, which usually find it difficult to access the capital they need to expand their businesses.
“Further, IFC’s support will help enhance market competitiveness, inspiring confidence in investors and drawing investments.”
In 2020, IFC invested $120m in private equity and venture capital funds to support companies in Latin America.