Featured photo: Guaranties for small business lending in Paraguay
Paraguayan entrepreneur Mercedes Cabrera de Idiarte started a clothing manufacturing business with five sewing machines, and today has 25 machines, 36 employees and sells apparel across Paraguay, generating annual revenue of 200 million guarani (about USD $45,000). Cabrera began working with the local Banco Familiar 19 years ago and her credit line with has risen to 15 million guarani. She used her last credit to build a new showroom and her next goal: to build a warehouse on the premises.
OPIC works with Banco Familiar through a microfinance facility with Citibank, and has guaranteed a $6 million Citibank loan to Familiar. The project has enabled Familiar to increase its lending to micro-businesses at longer tenors than are currently available in the domestic market, which is an efficient way to increase the availability of capital to the lower reaches of the Paraguayan economy, where it can benefit micro-businesses in the informal sector.