Summary of Anticipated Development Impacts

MARKET DEVELOPMENT

  • Strengthen local MSMEs and value chain: Fedecrédito will use FinDev Canada’s loan to primarily support its 55 financial institution members that in turn on-lend to their respective MSME clients in El Salvador.  
  • Support local employment and economy value-add: Fedecrédito supports thousands of MSMEs in El Salvador and the individuals they employ. As an employer, Fedecrédito offers benefits including insurance (health, life, vision, dental), a pension, parental leave, vacation days, performance bonuses, training opportunities for advancement, educational loans and scholarships, which exceed requirements stipulated by national law.    
  • Financial and non-financial services for MSMEs: Their financial products include micro- and agricultural loans, savings accounts, and both credit and debit cards. Fedecrédito serves its MSME clients through several channels, including 726 access points across 195 municipalities.      

Market development

The key development impact of the Fedecrédito investment is to provide access to financial services to MSMEs across El Salvador, channeling at least 40% to WMSMEs, to foster economic development and improve thousands of lives by supporting local jobs.

WOMEN’S ECONOMIC EMPOWERMENT  

  • This financing will support the expansion of lending to micro, small and medium-sized enterprises (“MSMEs") in El Salvador by Fedecrédito’s 55 members, with a minimum of 40% of the funds going to women-owned MSMEs (“WMSMEs”) through funds on-lent by Fedecrédito to its members.
  • Support women’s leadership, and quality employment: Within its internal operations, Fedecrédito maintains female representation at the executive level (24%) and throughout the organization (47%). FinDev Canada and the International Finance Corporation (IFC), the private sector lending arm of the World Bank, are exploring partnership opportunities to help Fedecrédito better understand and support the WMSME segment it serves.
  • Supporting women’s business ownership: Fedecrédito commits to channeling at least US$ 4M of FinDev Canada’s investment to WMSMEs. At present, Fedecrédito’s members direct 56% of their MSME loans to women by number and 27% by volume. Based on the volume earmarked for WMSMEs and the average size loan, it is estimated that FinDev Canada’s funding could support over a thousand WMSMEs across a variety of sectors. After securing a loan from Fedecrédito, clients receive a savings account, some specifically designed for women including a debit card that offers access to an affordable health plan for the women entrepreneur and her family.

CLIMATE MITIGATION AND ADAPTATION    

  • Sustainable practices within operations: Fedecrédito has taken proactive steps to reduce its carbon footprint and make efficient use of natural resources. In 2019, Fedecrédito installed solar roof panels at its headquarters which provide 26% of the building’s energy requirements. Fedecrédito’s additional initiatives focus on recycling, reforestation, and marine conservation programs as part of its CSR agenda.