IFC, a member of the World Bank Group, today signed an agreement to help Grupo Monge Holding S.A., a family-owned retailer of household goods and electronics in Central America, expand its operations in El Salvador, Guatemala, and Honduras, increasing access to consumer credit for low-income customers.
IFC's financing of up to $50 million is its first loan in which the client has the flexibility to draw from U.S. dollars as well as Costa Rican colones or Guatemalan quetzales through the swap market. This will promote development of the long-term local currency swap markets and benefit other Central American companies with foreign exchange risk exposures on their balance sheets.
"IFC has now become an essential partner," said Gaston Monge, Chief Executive Officer of Grupo Monge. "IFC's value-added went beyond a loan with tenor and structure that were otherwise unavailable. Their team has contributed significant advice to enhance the quality of our operations and facilitate compliance with the environmental and social standards of the World Bank Group."
"IFC's financing will support Grupo Monge's long-term expansion strategy to consolidate its regional market position. IFC has played a countercyclical role in supporting Grupo Monge at a time when access to capital markets has been difficult in Central America," said Atul Mehta, IFC Director for Latin America and the Caribbean.
IFC's total committed portfolio in Central America as of May 2008 was $719 million. IFC is expanding its operations in this region, focusing on supporting regional integration through private sector participation in infrastructure projects. IFC's strategy also looks to strengthen the financial sector by supporting access to finance for small and medium enterprises and housing finance. IFC also aims to help firms involved in agriculture and other services improve their competitiveness and expand within Central America and beyond.
Source: IFC
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