Montreal, February 7, 2022 - FinDev Canada, through an investment of US$ 8 million, has joined other leading development finance institutions to support private equity fund, the Central American Small Enterprise Investment Fund IV (CASEIF IV). CASEIF IV, managed by LAFISE Investment Management, aims to promote sustainable and inclusive economic development by investing in high growth businesses, including small and medium-sized enterprises (SMEs), in Central America, Colombia, and the Dominican Republic. This transaction qualifies for the 2X Challenge.
Private sector businesses play a major role in emerging economies as contributors to job creation and economic development, yet they face challenges getting the financing they need. CASEIF IV contributes to addressing the shortage of growth capital in Central America, which is vital for employment preservation and economic resilience, by supporting growth-oriented businesses, with a focus on firms operating in the agribusiness, food and beverage processing, manufacturing, education, and information technology sectors.
“Private businesses in Central America, Colombia, and the Dominican Republic are facing an unprecedented and difficult macroeconomic environment. They need capital to sustain operations and jobs,” said Paulo Martelli, Vice President and Chief Investment Officer of FinDev Canada. “This investment will allow CASEIF IV to finance growth-oriented enterprises so they can grow and create more jobs. The Fund is committed to actively contributing to women’s economic empowerment and sustainable economic growth.”
“As managers of CASEIF IV LP, we are encouraged by FinDev Canada’s equity investment. This is a recognition of LAFISE’s credibility, integrity and transparent handling in the management of private equity funds as well as the impact that these CASEIF Funds have had in the region through the growth and consolidation of its SMEs companies” said Mr. Erick Lagos, Managing Director of LAFISE Investment Management.
Local market development
SMEs are important contributors to job creation and core economic development. The World Bank estimates that they contribute up to 40% of national income (GDP) and create seven out of ten formal jobs in emerging economies1. In Latin America and the Caribbean, they have been hit particularly hard by the impact of COVID-19, with many being forced to close or lay off personnel. With the mandate to contribute to economic development and poverty reduction, the fund manager, LAFISE Investment Management, has a strong track record of supporting businesses that lead to job creation and local development and CASEIF IV will continue contributing to those objectives.
Women’s economic empowerment
LAFISE Investment Management is committed to promoting women’s economic empowerment throughout their portfolio. At least 30% of CASEIF IV funding will be channeled to 2X eligible businesses, and the Fund will also provide Technical Assistance to support portfolio companies with the development and implementation of gender action plans intended to raise women’s representation at all levels of operations.
This investment qualifies for the 2X Challenge and supports FinDev Canada’s contributions to SDG 8: Decent Work and Economic Growth and SDG 5: Gender Equality.
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 of 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 the 2X Challenge
The 2X Challenge was founded by the development finance institutions (DFIs) from the G7 as a call to action to shift more capital towards investments that empower women in developing countries to access entrepreneurship and leadership opportunities, quality jobs, and products and services that enhance their economic participation. More information about the 2X Challenge can be found here: https://www.2xchallenge.org
What’s the criteria for qualifying for a 2X investment?
- Whether a business is majority owned by women or founded by a woman
- At least 30% of women in senior management or on the board
- At least 30-50% of the employees spending on the sector of operations, and they have access to quality employment supporting women’s recruitment, retention and career advancement.
- Whether a product or service specifically or disproportionately benefits women
- At least 30% of loan proceeds in a deal through financial intermediaries supports women.
About LAFISE INVESTMENT MANAGEMENT
LAFISE INVESTMENT MANAGEMENT (LIM) is a management firm of private equity funds, that manages CASEIF Funds since 2000. LIM focused on the growth of small and medium-sized companies in Central America. In its 20 years of experience, LIM has accumulated extensive knowledge of its environment and way of doing business, as well as an important network of contacts in different business sectors inside and outside the Central American region. Since its founding, CASEIF's investors have been a world-renowned multilateral financial institution committed to the development of developing countries.
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