Completed Development AidData Chinese Aid

China Co-Financing Fund for Latin America and the Caribbean provides $25 million loan to Banco Sofisa for on-lending to SMEs

$25M USD

Funder	People's Bank of China (PBC)
Recipient Organization	Banco Sofisa S.A.
Country	Brazil
Start Date	Jul 02, 2021
End Date	Jun 06, 2033
Duration	4,357 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`110341`

Grant Description

China Co-Financing Fund for Latin America and the Caribbean contributes to USD 125 million tranche A of a loan to Brazilian Banco Sofisa for on-lending to SMEs in 2021 On July 2, 2021, the private sector institution of the Inter-American Development Bank (IDB) Group -- IDB Invest (formerly Inter-American Investment Corporation, or IIC) -- signed a USD $200 million financial package with Banco Sofisa S.A.

This financing package included $25 million from the China Co-Financing Fund for Latin America and the Caribbean (CHC), a fund established by the People's Bank of China (PBOC) and managed by IDB Invest. The financing was a credit line with an A/B structure.

Along with the co-financing mobilized from the CHC, IDB Invest itself contributed USD $20 million, IDB contributed USD $30 million, Proparco contributed USD $30 million, and FinDev Canada contributed a final USD$20 million to the A-loan. Another $75 million was to be provided by unspecified B-lenders.

The A-loan carried a 4-year maturity (final maturity date: May 15, 2025) while the B-loan carried a 2-year maturity. As of February 2025, the full $25 million committed by the CHC had been disbursed.

The loan proceeds were to be used by Banco Sofisa to increase lending to small and medium-sized enterprises (SMEs), particularly following the COVID-19 pandemic.

The project was part of the 2X Challenge, and as such at least 30% of the credit line was to be used for financing women led or owned SMEs.

IDB Invest, Proparco, and FinDev Canada also provided technical assistance to Banco Sofisa to help identify and lend to more sustainable SMEs, as well as increase lending to women led or owned SMEs in their portfolio. In accordance with IDB Invest policy, an Environmental and Social Review was conducted for the project.

📋 Staff Comments

The China Co-Financing Fund for Latin America and the Caribbean was established on January 14, 2013 with a contribution of $2 billion by the People's Bank of China. It is administered by the IDB. For more information, see Record ID#86526.
The IDB Invest project identification number is 13303-01. IDB Invest project title is Sofisa AB Loan for SME Financing. The Inter-American Development Bank's Operation Number for the China Co-Financing Fund contribution to this loan is 5270/CH-BR.

📚 Sources & References

Sofisa AB Loan for SME Financing
Banco Sofisa, a bank committed to SMEs and women’s entrepreneurship in Brazil
IDB Invest
Proparco
FinDev Canada and Sofisa support SMEs in Brazil by facilitating access to financing Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.