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Posted on July 18, 2022 | Updated at 1PM

FinDev Canada and 2X Canada support microfinance institutions to promote lending to small businesses in Latin America and the Caribbean

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Montreal, July 19, 2022 – Latin America and the Caribbean continue to be challenged by the COVID-19 crisis. Microfinance institutions in the region have been impacted, which compromises their ability to support businesses and enhance access to finance among vulnerable populations. FinDev Canada is investing USD 15 million in Locfund Next, which provides much-needed financing in local currencies to small and medium-sized microfinance institutions (tier 2 and 3) who support micro and small businesses.  

According to the World Bank, 217 million Latin American and Caribbean women and men have no access to financial services, a problem exacerbated by the pandemic. Through their third fund, Locfund Next seeks to address this issue by providing financing and technical assistance to microfinance institutions, which will provide financial services to low-income and vulnerable populations disproportionately affected by the pandemic, particularly women.    

Locfund Next's previous funds, Locfund I and Locfund II, have played an important role in supporting financial inclusion in Latin America. Their third fund has already reached 32 microfinance institutions in eleven countries since its launch, and it aims to reach at least 70 institutions in the coming years. 

The USD 15-million investment includes a USD 7.5-million equity investment from the 2X Canada facility, the second transaction for the facility implemented by FinDev Canada, and funded by Global Affairs Canada, to drive positive impact on women’s economic empowerment.    

“Microfinance institutions play a vital role in increasing financial inclusion for vulnerable populations, and they have faced significant challenges in accessing the financing they need to operate and grow during the COVID-19 pandemic,” said Paulo Martelli, VP and Chief Investment Officer of FinDev Canada. “By increasing their access to local currency financing in particular, we can contribute to extending access to finance for small businesses, the main job creators in the region.”   

“Locfund Next is pleased to partner with FinDev Canada and 2X Canada to join efforts towards our common goals of promoting women’s economic empowerment and facilitating digital transformation and financial inclusion, ” said Daniel Maldonado, Investor Relations Officer at “Bolivian Investment Management” (BIM), Locfund Next’s manager.  


Women’s economic empowerment 

Lack of access to capital is a strong barrier for women entrepreneurs that has been amplified by the challenges of slower economic recovery from COVID-19 for Latin American and Caribbean countries. The formal finance gap for women-owned enterprises has been significant, estimated at approximately US$ 100 billion, which is due to unfavorable terms and conditions (e.g., loan size). Microfinance institutions supported by Locfund Next have a majority (~70 per cent) women customers (individuals and businesses) and therefore directly contribute to women’s economic empowerment.   


Market development 

In support of its mission to disburse widespread access to capital, Locfund Next seeks to reach at least 600,000 end clients, with an indirect impact on 2.4 million people across Latin America and the Caribbean. Its technical assistance facility supports microfinance institutions with their digital transformation and digital inclusion for women, rural, and climate-related clients to provide broader access to digital products and services.  

This investment will contribute to FinDev Canada’s long-term development impact goals and its contributions to the United Nations Sustainable Development Goals, No Poverty (SDG 1), Gender Equality (SDG 5), Decent Work and Economic Growth (SDG 8), and Reduced Inequalities (SDG 10).  




Development Finance Institutions and COVID-19 
FinDev Canada has a mandate to support companies that have a presence in the areas most affected by the COVID-19 pandemic. Investments will help guarantee that developing markets continue to have liquidity, providing important support for the recovery from the economic and social consequences of this crisis. 


About FinDev Canada 
The Development Finance Institute Canada (DFIC) Inc., operating under the FinDev Canada brand, is a Canadian institution dedicated to providing financial services to the private sector in developing countries with the aim of combating poverty through economic growth by focusing on three main topics: economic development through job creation, women’s economic empowerment, and climate change mitigation. The Development Finance Institute Canada Inc. is a wholly owned subsidiary of Export Development Canada (EDC). 


About 2X Canada: Inclusive Economic Recovery 
2X Canada is a CAD 75.9-million blended finance facility implemented by FinDev Canada and funded by the Government of Canada through Global Affairs Canada. It aims to enhance the resilience and socioeconomic well-being of low-income, underserved, and marginalized populations, particularly women and girls, in the Caribbean. The facility adopts a whole-of-Canada approach to help address COVID-19 economic recovery in ODA-eligible countries, to support investments that drive positive impact on women’s economic empowerment in Latin America and the Caribbean. 


About Global Affairs Canada 
Global Affairs Canada is a federal department of the Government of Canada that works to define, shape and advance Canada’s interests and values in a complex global environment. The department manages diplomatic relations, promotes international trade, and provides consular support. It leads international development, humanitarian, and peace and security assistance efforts. It also contributes to national security and the development of international law.  


About Locfund Next 

Locfund Next is a debt fund that provides financing in local currency to microfinance institutions in Latin America and the Caribbean. The fund is managed by “Bolivian Investment Management” (BIM) with the vision of working together to strengthen financial inclusion through the microfinance ecosystem in an environment that has shown to increasingly require digital transformation. 


Media contacts:

FinDev Canada
Angela Rodriguez
Head of Marketing and Communications