Summary of Anticipated Development Impacts
MARKET DEVELOPMENT
- Increase MSME and climate lending: MSMEs play a critical role in Honduras, accounting for 50% of GDP and providing 70% of employment.1 Despite their importance, they face a persistent financing gap of USD 5.2B, which limits their growth potential.2 Banpaís has steadily grown its MSME loan portfolio reaching USD 488M in 2024. This transaction will further support Banpaís in growing its MSME and climate lending activities, improving access to finance for enterprises across the country. FinDev Canada’s financing is expected to enable Banpaís to scale up its climate lending by at least USD 17.5M.
GENDER EQUALITY:
- Increase access to finance for WMSMEs: In Honduras, women own 42% of small businesses and 30% of medium‑sized businesses yet face a financing gap of approximately USD 1.1B. To help reduce this gap, 30% of FinDev Canada’s loan proceeds will be earmarked for WMSMEs. The transaction will also support the Bank’s efforts to strengthen its data management systems for more effective tracking of gender‑disaggregated data.
- Support women’s leadership and decent employment: Banpaís demonstrates strong gender representation at the institutional level, with women representing 55% of the workforce and 50% of the C‑suite, exceeding 2X Challenge thresholds. The Bank also promotes women’s leadership through initiatives such as its Woman Action Smile program which promotes career advancement through succession plans.
- 2X Challenge Alignment: FinDev Canada’s loan proceeds are fully aligned with the 2024–2027 2X Challenge criteria for financial institutions, meeting the leadership and employment direct criteria as well as the portfolio criterion.
CLIMATE AND NATURE ACTION
- Contribute to climate change mitigation and resilience: Honduras is among the countries most affected by climate‑related disasters, facing increasing pressure on energy, water, and infrastructure. By allocating 35% of proceeds to loans aligned with the MDBs/IDFC Common Principles for Climate Finance, the transaction will finance renewable energy and water and sanitation projects. These investments will support Honduras’ goal of increasing the share of renewable energy in its electricity mix to 80% by 2038, while addressing critical vulnerabilities in water systems and infrastructure caused by extreme weather events.3
- Strengthen climate finance practices: In partnership with eco.business Fund, Banpaís is developing a climate strategy and a green finance framework, while building internal capacity to assess and manage climate‑related financial risks.