Madrid, November 20, 2023. COFIDES and the Society for the Inclusion of Micro and Small Enterprises in Central America and the Caribbean (SICSA) have signed an agreement to launch a technical assistance project that will offer support to financial service providers (FSP) that have borrowed funds from SICSA.
Framed within the Triple Inclusive Finance (TIF) Program, the agreement provides for a non-refundable contribution for a maximum amount of 720,122 euros to supplement a loan of three million dollars previously granted to SICSA by Cooperación Española through FONPRODE to promote the financial inclusion of Central American micro and small enterprises.
This technical assistance project will strengthen the financial inclusion sector by supporting and boosting microfinance entities that are SICSA borrowers. This project is expected to strengthen the financing role in the region played by some 15 microfinance entities and FSPs by developing initiatives that will make contributions in three ways:
- Intensification of Financing: through activities such as expanding the range of financial products adapted to market needs, supporting the transformation of small and medium-sized FSPs, improving credit technology, implementing/improving social performance management systems, and promoting education for micro, small, and medium-sized enterprises.
- Green Microfinance: training for FSPs aimed at measuring and mitigating environmental risks, promotion of climate-responsible, smart agriculture with the addition of climate risk insurance for FSPs that add these services to their portfolio, training of FSP staff for the development of ecological products, and implementation of environmental management systems.
- Institutional Strengthening: through improved credit risk management and mitigation efforts with the adoption of a customer-centered approach, support for FSPs to improve their management in the event of disasters by designing contingency plans with an approach based on continuity, and improved financial management, making adjustments to transaction safeguarding systems.
The Society for the Inclusion of Micro and Small Enterprises in Central America and the Caribbean (SICSA) is a tier-two financial entity established in 2007 as an initiative of the Central American and Caribbean Microfinance Network (REDCAMIF). It finances FSPs that seek to promote local development by providing funds to micro, small, and medium-sized businesses.
COFIDES is a state-owned enterprise specialized in the management of State funds that provide medium- and long-term financing for private investments linked to different public policy purposes. COFIDES directly manages funds aimed at supporting the internationalization of Spanish firms, strengthening the solvency of companies severely affected by the COVID-19 pandemic, to attract foreign direct investment into Spain through co-investment deals and to contribute to the growth of the impact investment ecosystem in Spain. In addition, COFIDES supports the management of the financial cooperation portfolio of the Spanish Agency for International Development Cooperation, promoting sustainable development in emerging economies and developing countries. In the ownership structure of the Company, the Spanish State holds 53% of the equity. The remaining 47% is held by Banco Santander, Banco Bilbao Vizcaya Argentaria (BBVA), Banco Sabadell and Development Bank of Latin America (CAF).