OPIC and Wells Fargo Partner with Banco Pichincha to Expand Lending to Women in Ecuador
November 13, 2019
Financing of $108.5 million will support female entrepreneurs
QUITO – The Overseas Private Investment Corporation (OPIC) has executed a finance agreement for a $100 million loan to Banco Pichincha alongside financing of $8.5 million from Wells Fargo Bank. Their partnership will support lending to micro, small, and medium enterprises (MSMEs) in Ecuador that are owned by, led by, or support women.
“When women have access to capital, they start and grow thriving businesses that provide for their families and can transform their communities,” said OPIC Senior Advisor for the Western Hemisphere Kristie Pellecchia. “Through this transaction, OPIC is proud to join partners who share its commitment to advancing women’s financial inclusion in order to unlock new opportunities for growth in Ecuador and across Latin America.”
“Our bank was the first enterprise in Ecuador to become a signatory of 'The Women’s Empowerment Principles' of the United Nations, and also the first to join the Global Banking Alliance for Women that supports programs focused on financial growth of women,” said Banco Pichincha President Antonio Acosta. “The agreement between our entities will strengthen the role of female clients in the economy and reinforce our commitment with financial inclusion.”
“We are pleased to support Banco Pichincha’s lending practice helping women-owned and women-managed micro, small, and medium enterprises gain greater access to bank lending in Ecuador,” said Wells Fargo Senior Vice President Thomas Tuffy João.
“Developing the economic potential of Ecuadorian women—who work on average 20 hours more per week than men—will benefit all Ecuadorians. The loans that result from this financial agreement will boost women’s ability to provide for their families, improve their communities, and contribute to the economic growth of Ecuador,” said U.S. Ambassador to Ecuador Michael J. Fitzpatrick.
OPIC and Wells Fargo’s financing will enable Banco Pichincha to expand its lending portfolio for MSMEs in Ecuador. One hundred percent of the total loan proceeds will go to women. The project is expected to reach 53,000 female entrepreneurs in its first five years.
The partnership will help address a significant credit gap for MSMEs in Ecuador, especially those owned or led by women. Despite employing approximately 40 percent of the country’s workforce, MSMEs in Ecuador suffer an estimated shortfall in access to credit of $18 billion, equivalent to 17 percent of the GDP. The credit gap is particularly wide for women, who own only 14 percent of the country’s MSMEs.
The agreement furthers Banco Pichincha and OPIC’s collaborative efforts to support inclusive financial services in Ecuador. In May, they signed a $160 million agreement to support mortgage loans and women-led microenterprises.
OPIC’s investment advances 2X Americas, an initiative to mobilize private capital to businesses and funds owned by, led by, or providing a product or service that intentionally empowers women in Latin America and the Caribbean. The initiative falls under the agency’s broader 2X Women’s Initiative.
A leading bank in Ecuador, Banco Pichincha is committed to addressing the challenges of a diverse and digital society with new needs through inclusive finance. The bank supports micro, small, and medium entrepreneurs in Ecuador through its comprehensive services, for which it has received international recognition such as the Smart Campaign Client Protection Certificate and the Best Issuing Bank Partner for Women award.
This announcement comes as OPIC prepares to transform into a new U.S. Government agency called the U.S. International Development Finance Corporation (DFC). Equipped with a more than doubled investment cap of $60 billion and new financial tools, DFC has more resources and flexibility to invest in priority regions such as Latin America and expanded flexibility to collaborate with like-minded partners on priorities like women’s economic empowerment.
The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity fund managers.
OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.
About Banco Pichincha
Banco Pichincha, the largest financial institution in Ecuador, holds assets of US $10,6 billion as of December 2018, equivalent to 26% of the banking system. After 113 years of activity, it has grown from its origins as a local bank to become an international financial entity with presence in six countries. In Peru, it develops an intense activity in the microfinance segment. In Colombia it is focused on granting of educational and vehicle loans; while in Spain it serves migrants, without neglecting the business world. Its operations in Miami and Panama also support bilateral foreign trade transactions.