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TCX: Capital increase of over USD 200m

Project

Financial services
TCX A Shares
tcxfund
Signature date
Location
Multi-country Global
Financing tool
Equity investment
Financing amount (Euro)
3940000
Financing details
USD 4.6m Equity Investment
Customer
THE CURRENCY EXCHANGE
Type of customer
Investment fund
Country of headquarters
The Netherlands
Project number
PZZ1493
Environmental and social ranking
IF-C
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This information is given at the time of signature, without prejudice to any developments in the operation/project.

Proparco is supporting the most vulnerable to the foreign exchange risk related to the Covid-19 crisis by participating in the capital increase of TCX

Client presentation

The Currency Exchange Fund N.V (“TCX”) is an open-end fund that offers derivatives to its members and their clients. The objective is to hedge the foreign exchange and interest rate margins that are inherent to their local currency operations. TCX provides currency hedges on markets or maturities that are not covered by commercial banks. This allows borrowers in developing countries to raise debt in their own currency rather than in hard currency.  

Project description

Following an initial investment of USD 5.1m in 2007, Proparco is making a new USD 4.6m investment to strengthen the capital base of TCX. With this new operation, Proparco is continuing to develop its portfolio of financing and guarantees in local currency, which primarily benefits players in financial inclusion and MSME financing. TCX is a key partner for Proparco in this approach.   

Project impact

Proparco’s financing is expected to: 

  • Maintain some 39,000 direct and indirect jobs over the next 5 years, mainly in the SMEs that benefit from a loan from client SME banks and microentrepreneurs that benefit from financing from client MFIs;
  • Indirectly support financial inclusion, as Proparco’s financing will indirectly contribute to increasing the additional volume of microcredits in the country;
  • Support SME development through an additional volume of SME loans made possible to support access to financing for some 100 SMEs;
  • Support the development of REN projects which currently account for a relatively low share of TCX’s portfolio (6% Infrastructure and REN).