Completed Mixed AidData Chinese Aid

[China Co-Financing Fund] IDB administers 20 million USD loan from CHC to Banco Pichincha for Financial Services and Microenterprise Development for the Base of the Pyramid (CREDIFE) Project

$20M USD

Funder	People's Bank of China (PBC)
Recipient Organization	Banco Pichincha
Country	Ecuador
Start Date	Feb 25, 2015
End Date	Sep 29, 2032
Duration	6,426 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`85350`

Grant Description

[China Co-Financing Fund] IDB administers 20 million USD loan from CHC to Banco Pichincha for Financial Services and Microenterprise Development for the Base of the Pyramid (CREDIFE) Project On 16 July 2014, the Inter-American Development Bank (IDB) authorized a loan for Banco Pichincha (BP) to finance the Financial Services and Microenterprise Development for the Base of the Pyramid (CREDIFE) Project.

The IDB authorized the provision of up to 40 million USD from its ordinary capital, including 10 million USD resources from the Opportunities for the Majority Financing Facility (Loan 3250A/OC-EC-1, Loan 3250A/OC-EC-2), and the provision of up to 20 million USD from the China Co-Financing Fund for Latin America and the Caribbean (CHC) (Loan 3250/CH-EC), which is a fund that is fully financed by a contribution from the People's Bank of China.

The IDB would also administer a B loan for up to 20 million USD, which would be financed by other commercial banks or financial institutions (Loan 3250B/OC-EC-1-PN-BAALPNB, Loan 3250B/OC-EC-2, Loan 3250B/OC-EC-1-NE-TRIOZSB).

📋 Loan / Grant Terms

💰 Loan Amountwould have a maturity of 6 years with a a 3 year grace period

⏳ Grace Period3 years

Then, on February 25, 2015, the IDB signed the four loan contracts with Banco Pichincha, worth a total of USD $80 million.

Banco Pichincha's 2017 Annual Report lists a debt obligation of 71 million USD owed to the IDB as of 31 December 2017, with an interest rate of 6M LIBOR + 5.12%. As of the end of 2020, Banco Pichincha had 9.643 million USD remaining as a debt obligation.

The loan proceeds were to be allocated (i) through BP's CREDIFE Desarrollo Microempresarial to the expansion of the productive credit portfolio, especially for the acquisition of fixed assets, associated working capital, as well as minor improvements to the physical structure of businesses; and (ii) to the financing of the investments required by those microentrepreneurs who qualify to become non-bank correspondents (NCB), with the purpose of expanding the geographic coverage and the offer of financial products and services nationwide.

The CREDIFE project reached completion, but its precise commencement and completion dates are unknown The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella Record ID#86526.

📋 Staff Comments

For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
Banco Pichincha's 2017 Annual Report lists a final amortization date in June 2021, while the 2020 Annual Report lists May 15, 2021 as the final maturity date. For now, May 15, 2021 has been coded as the final maturity date, as it is (a) the most updated information from an official source, (b) closer to the expected maturity date if the loan officially carried a 6-year maturity, and (c) the more precise information.
The IADB project identification number is EC-L1104 ('Credife: Financial Services and Microenterprise Development for the BoP'). The IADB loan identification (operation) number is 3250/CH-EC. IADB project EC-L1139 ('Credife - Micro-enterprises Financing Partnership') also provided financing to the project.
Banco Pichincha is Ecuador's largest private-sector bank (by capitalization and number of depositors), with the largest branch and ATM networks in the country. It was founded in Quito in 1906 and is the primary bank of the Pichincha Group, a business group that includes Diners Club of Ecuador, Picaval, and Teleamazonas. Banco Pichincha has subsidiaries in Peru, Colombia, Spain, Panama, and the US.
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

📚 Sources & References

Approach Paper: Ecuador 2012-2017
RESOLUTION DE-91/14
EC-L1139 : Credife - Micro-enterprises Financing Partnership
Banco Pichincha recibe crédito por USD 80 millones
EC-L1104 : Credife: Financial Services and Microenterprise Development for the BoP
Estadios Financieros 2020
Estados Financieros 2017
Aprovechamiento de corresponsales no bancarios para llevar servicios fi nancieros a micro y pequeñas empresas sin servicios bancarios en Ecuador
Banco Pichincha recibe crédito de 80 millones para apoyo a microempresarios
Credife: Financial Services and Microenterprise Development for the BoP 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.

All Grantees

Banco Pichincha

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