IDB: Peru’s BANBIF gets $20 million subordinated loan to boost mortgage lending
By Fernando Álvarez: Ex IMF Economist
According to information published on January 30, the Inter-American Development Bank (IDB) closed and disbursed a $20 million subordinated loan to Banco Interamericano de Finanzas of Peru (BanBif) that will pave the way for increased mortgage lending. The IDB loan, which qualifies as Tier II under the Peruvian regulation, will contribute to strengthen Banbif’s capital to fund an expansion of mortgage lending to meeting rising demand. The operation reflects a key priority of the IDB’s beyond Banking Program, which aims at democratizing access to finance for segments that have been historically underserved by financial intermediaries.
“We are providing Banbif with long-term funding to enhance its capacity to significantly expand its financing operations in the housing sector, in a profitable, efficient, and sustainable manner,’’ said Daniela Carrera-Marquis, Chief of the IDB Financial Markets Division at the Structured and Corporate Finance Department. “Increased access to financing is key to help Peru to reduce its housing deficit.”
The housing deficit in Peru today both in terms of quantity and quality stands at around 1.8 million dwellings and only one in every 50 Peruvian families currently benefit from a housing loan, a low penetration when compared with other countries in the region, according to Marcelo Paz, the IDB project team leader.
The IDB loan will support BanBif’s strategy to diversify its operations away from corporate banking. Since 2008, the bank began targeting primarily small and medium-sized businesses as well as the middle and lower-middle income segments of retail banking with products such as credit cards, consumer loans and housing finance.
"This transaction bolsters our relationship with the IDB and our pledge to focus our efforts on expanding our housing portfolio in the middle and lower-middle income segments of the economy," said Juan Ignacio de la Vega, BanBif’s chief executive officer.
About the IDB's Structured and Corporate Finance Department
The Structured and Corporate Finance Department (SCF) leads all IDB's non-sovereign guaranteed operations for large-scale projects, as well as those linked to companies and financial institutions. Through its Loan Syndication Program, SCF acts as a catalyst, helping to engage third-party resources by partnering with commercial banks, institutional investors, co-guarantors and other co-lenders for projects with high developmental impact.
