Itaú Unibanco: Providing small loans to thousands of small businesses
Sector: Financial Services
Challenge: One of the biggest challenges of investing to achieve a significant economic, social or environmental impact is finding a way to get the investment to the individuals and communities that need it most.
Solution: OPIC often collaborates with financial intermediaries that have a strong local presence, to support lending to remote and underserved populations.
In one such deal, OPIC in 2013 committed to provide up to $400 million in financing to Brazil’s Itaú Unibanco S.A. to support expansion of the bank’s small and medium enterprise portfolio.
Impact: Itaú Unibanco earned the highest development score among all the projects OPIC committed to in 2013, a testament to the broad development impact of loans to financial intermediaries.
OPIC’s financing is expected to support 5,000 loans to businesses with assets or annual sales of up to $15 million, with individual loans ranging in size from $1,000 to $2 million. Most of the new funds injected into the country will go to underdeveloped regions, reaching the thousands of small businesses that are so critical to the country’s economic growth and job creation.
In addition to focusing its lending on small enterprises that would otherwise be hampered by limited access to financing, Itaú Unibanco plans to provide loans with longer tenors than are typically available, and to complement its loans with business development services such as account management tools that are traditionally offered only to larger clients.
This project was profiled in 2014