Ecuador: Developing SME financing

Banco Guayaquil is Ecuador’s fourth largest private bank. The bank was set up in 1923 and started its operations as Banco Italiano. It took its current name in 1941, after its changeover to Ecuadorian capital during the Second World War. 

Banco Guayaquil operates nationwide and offers a wide range of products, with a specialization in the business segment, which accounts for some 57% of the bank’s loan portfolio.

This operation aims to support Banco Guayaquil’s development of its SME financing activity. It involves USD 75m of syndicated financing arranged by CAF in the form of an A/B loan. CAF, Proparco and Bio Invest are all three lenders in the A Loan, each for USD 15m, while Finance in Motion, Multibank and Banco de Occidente are lenders in the B Loan. The funds made available by Finance in Motion will be used to finance agricultural projects.

Ecuadorian SMEs will be able to rely on the network of the bank, which has branches in rural areas, but also over 5,000 “bancos del barrio”, which are “mini-branches” set up in grocery stores or other shops, often in remote areas (e.g. in Amazonia).

Based on the average loan allocated to Ecuadorian SMEs by Banco Guayaquil, PROPARCO’s financing should support over 270 additional SMEs and should increase the bank’s SME financing to some USD 257m.

The project will also support employment for local communities. It should be noted that 56% of jobs in the bank are held by women. Based on an eco-responsible approach, the bank is also seeking to reduce its carbon footprint. It is also interested in developing a green activity.