Days ago, both entities signed contracts that formalize the incorporation of BID Invest as a new shareholder of the financial institution.
IDB Invest announced the capital investment of up to 61.2 million soles (approximately US$16.2 million) in Caja Municipal de Ahorro y Crédito Huancayo (Caja Huancayo) in Peru. This investment seeks to improve access to financing for micro, small and medium-sized enterprises (MSMEs) and benefit clients from vulnerable populations in the Andean country.
The microfinance industry has been instrumental in reducing financing gaps for MSMEs, especially in areas far from urban centers. Municipal Savings and Credit Funds (CMAC) are the main sector of this industry in Peru and have played a key role in financial inclusion, especially in peri-urban, secondary and rural areas.
Since the amendment to the Municipal Savings Banks Law in 2017, strategic partners such as IDB Invest have been allowed to join the shareholding of these entities, boosting their growth. In this regard, last Friday Caja Huancayo announced the signing of contracts that formalize the incorporation of IDB Invest as a new shareholder of the financial entity. This formalization responds to an agreement previously established and reported to the Superintendency of the Securities Market (SMV) on May 21, 2024. With this incorporation, Caja Huancayo strengthens its share capital through a series of measures that include the conversion of a loan and new capital contributions by IDB Invest.
On the other hand, IDB Invest becomes the first multilateral development bank to invest capital in the CMAC system after the change in law, supporting Caja Huancayo's focus on MSMEs and vulnerable populations. This strengthens its capital to expand its credit portfolio and promote financial inclusion in Peru.
In addition, IDB Invest and Caja Huancayo signed a gender, diversity and inclusion (GDI) advisory agreement to create a value proposition for women microentrepreneurs and facilitate their growth into the SME segment. The project includes an analysis of Caja Huancayo's portfolio and policies to detect biases and opportunities, and a market study to understand the needs of women entrepreneurs, allowing the design of a specific offer for SMEs led by women.
IDB Invest will help Caja Huancayo strengthen its approach in the Amazon region and its management and impact capabilities as part of the Amazon Financial Network. This support will optimize the collection and analysis of impact data, allowing for the generation of business insights, a better understanding of clients, and improved service offerings for SMEs, with a focus on gender.
As part of the project, a new corporate governance plan will be created to strengthen and expand the Fund's operations. IDB Invest will have a representative on the Board of Directors, allowing it to influence the strategic direction and the implementation of best practices.
The operation seeks to contribute to the following UN SDGs: End of poverty (SDG 1), Decent work and economic growth (SDG 8), Industry and innovation (SDG 9), Reduction of inequality (SDG 10) and Responsible consumption and production (SDG 12).
