Bogotá, May 6th, 2024—Microentrepreneurs in Colombia will have improved access to finance, including women-led enterprises, with IFC providing COP 120 billion (about $30 million) to Banco Mundo Mujer (BMM), the country's largest private microfinance bank. The aim is to close the micro, small, and medium enterprise (MSME) finance gap, fostering employment and economic growth in Colombia.
IFC's funding will allow BMM to support largely informal microentrepreneurs—60 percent of which are women and 46 percent earn less than COP 3 million ($630) per month—and continue to promote lending to the country's underserved segments.
MSMEs are the main engine of economic growth in Colombia, representing 99% of the country's businesses and generating about 40% of GDP and 65% of employment, according to OECD. Yet they have limited access to formal financial services and the MSME finance gap is of 13%of GDP with disparities along gender and enterprise size.
Edgar González, BMM´s Financial and Administrative Vice President, said: "As a leading market player, IFC's long-term financing, not readily available in the market, will help diversify the bank's funding base. Accordingly, we look forward to extending services to more clients, while addressing gaps in formal financing for local microenterprises, a substantial number of which are led by women."
According to national surveys, COVID-19 affected virtually every microenterprise through significant reductions in sales and challenges in accessing financial services. Given this scenario, MSMEs need access to capital to finance investments in inventory and inputs to resume economic activity and to adapt business models to changing economic conditions.
Elizabeth Martínez de Marcano, IFC's Regional Director for Colombia, Mexico, Central America and the Caribbean, said: "IFC's financing to a leading microfinance institution will help support informal businesses and women microentrepreneurs in Colombia, sending a positive signal to the market and catalyzing investor response. This is expected to boost economic resilience and recovery, especially in the aftermath of the pandemic as well as amid ongoing multiple global crises."
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About BMM
BMM is the largest private microfinance bank in Colombia, with an 11.2% market share of the banking industry's microfinance portfolio. BMM's controlling shareholder is Fundacion Mundo Mujer (FMM), holding 90.3% of the shares directly and indirectly. FMM was founded in May 1985 in Popayán, Colombia, as a non-governmental organization affiliated with the Women's World Banking (WWB) network with the purpose of attending the financial needs of unbanked low-income individuals.
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