Posted on April 6, 2021 | Updated at 11AM

Sustainable investors unite to provide USD 80 million to expand SME financing insured by AVLA Perú, strengthening markets and promoting jobs

Montreal, April 6, 2021 – FinDev Canada, Barclays and responsAbility will participate in a USD 80 million debt facility that will allow AVLA Perú Compañia de Seguros SA, local leader in credit insurance, to facilitate access to capital for small and medium enterprises. This will contribute to business growth and job creation in the region.

Given the limited capacity of the credit guarantee market in Peru, the country’s 80,000+ SMEs face difficulties to access the financing they need to weather the impact of COVID-related restrictions.

By contributing USD 20 million to the new financing facility, FinDev Canada, alongside global investors such as responsAbility and Lead Arranger Barclays, expect to reinforce Peru’s SME financing alternatives with benefits that accrue to smaller companies.

AVLA Perú plays an important role in reducing the SME financing gap with financial products and services that address their needs, including longer tenors, faster capital disbursement rates, and tailored repayment schedules.

With the new financing, AVLA Perú will support SMEs seeking loans as small as USD 100K through credit guarantees, a product offering that the company has struggled to provide in the past without strategic financing partners.

“The Peruvian economy has been performing well in recent years, albeit the recent impact of the health crisis,” said Paulo Martelli, Chief Investment Officer of FinDev Canada. “This facility will promote access to finance for SMEs, which are key for job creation and economic growth.”

“We are proud to facilitate this flow of investment to SMEs and expand access to the financing of entrepreneurs in Peru,” said Enrique Hurtado, Head of Financial Institutions Debt LATAM at responsAbility. “These entrepreneurs need to recover and grow their businesses, create jobs, and help their communities thrive. SME financing is an area of increasing focus for responsAbility globally.”

"Through the financing provided by international investors and insurance underwriting by AVLA, we hope to deliver a solution lack of financing for SMEs in Peru." Commented Ignacio Alamos - CEO of AVLA, also "counting on global investors to finance the SMEs we insure, is key to our strategy, as we export our model to new markets" emphasized Luis Bryce - Corporate Head of Capital Markets at AVLA.

David Retchkiman Niño de Rivera from the Emerging Markets Credit team at Lead Arranger Barclays said: “The transaction’s structure allows for foreign investment in Peru by global investors while collaborating with an investment grade financial institution that supports SMEs. With the guidance of FinDev Canada and ResponsAbility in ESG, gender equality, and development impact requirements, the transaction also enables enhanced monitoring of the social and environmental impact of AVLA´s business.”

 

Boosting local markets

SMEs make up a large proportion of the Peruvian economy and provide more than 1.9 million jobs. As a result of the pandemic, Peru experienced some of the largest job losses in Latin America.

The investment will enable AVLA Perú to provide financing guarantees to an estimated 47 SMEs, which support over 2.200 jobs. Financing for SMEs is critical, particularly given government estimates that only 35% of SMEs currently operating in Peru have accessed loans from banks or regional and municipal savings and loans cooperatives.

 

Enhancing women’s economic empowerment

FinDev Canada and DEG, AVLA Perú’s largest shareholder, will support the financial institution in the implementation of a Gender Impact Strategy to promote women’s economic empowerment through gender smart products and services for women-owned SMEs.

FinDev Canada also supports AVLA Perú’s internal efforts to drive gender equality among its workforce, where women account for 42% of employees and 36% of senior leadership, as well as 50% of employees receiving job promotions in 2019. The company also plans to develop an Equal Pay Policy.

 

Development Finance Institutions and COVID-19

FinDev Canada is committed to remaining open for business to serve target regions during the COVID-19 pandemic. Investment will help ensure that liquidity continues to reach developing markets, helping them to recover from the economic and social consequences of this crisis.

 

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About FinDev Canada:
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 themes: economic development through job creation, women’s economic empowerment, and climate change mitigation. The Development Finance Institute Canada (DFIC) Inc. is a wholly owned subsidiary of Export Development Canada (EDC). Find out more about FinDev Canada here.

 

About responsAbility Investments AG (www.responsability.com
A leading impact asset manager with an 18-year track record, responsAbility manages USD 3.5 bn of assets invested in over 300 ESG-managed high-impact companies across 76 emerging economies. Since the company's inception in 2003, responsAbility-managed funds have invested over USD 10 bn in private debt and private equity with companies in the sectors of sustainable food, financial inclusion and climate finance whose business models directly support the United Nation's Sustainable Development Goals (SDGs). 

 

About AVLA
AVLA is an insurance group that offers comprehensive solutions in Latin America through Guarantee Insurance, Credit Insurance and Financing Solutions. AVLA currently has operations in Chile, Peru and Mexico, supporting 50,000 companies with its different solutions.