IDB Invest, a member of the Inter-American Development Bank (IDB), recently organized a USD 75 million social bond issue for Banco Nacional de Costa Rica (BNCR), a public bank. The funding is intended to strengthen the capital position of the BNCR and increase its financing of micro, small and medium-sized enterprises (MSMEs) in Costa Rica. IDB Invest will buy a portion of the bonds for a total of USD 45 million, and the Canadian government’s FinDev Canada will invest USD 30 million in the issue.
BNCR has pledged to allocate 40% of the proceeds of the bond to women-led MSMEs. To support this effort, FinDev Canada collaborated with BNCR to strengthen and expand BNCR financial products in line with the United Nations Women’s Empowerment Principles (WEPs). The bond issue has been certified in accordance with the Social Bond Principles of the International Capital Market Association, based in Switzerland.
BNCR was established in 1914 and serves individuals and businesses of all sizes with total assets of USD 7.2 billion in 2020. In addition to banking services, BNCR offers fund management, insurance , retirement and brokerage.
BID Invest seeks to promote economic development through projects in the areas of agriculture, financial inclusion, sustainable energy and transportation. In 2020, it had $16.1 billion in development-related assets, deployed through approximately 400 clients in 47 countries. Established in 1959, the IDB Group works to promote “environmentally friendly” economic development through the improvement of health, education and infrastructure in Latin America and the Caribbean. In 2020, it says it issued $14 billion in loans and grants, ending the year with assets of $152 billion.
FinDev Canada, also known as Development Finance Institute Canada, was established in 2018 as a subsidiary of Export Development Canada, a government export credit agency. FinDev Canada’s goal is to support job creation and the economic empowerment of women. The institution is active in the private sector in Latin America and the Caribbean as well as in Sub-Saharan Africa through direct loans, guarantees, structured finance and equity investments. In 2020, FinDev Canada signed new commitments worth USD 201 million (CAD 257 million).
By Hasnat Aslam, Research Associate
Sources and additional resources
IDB press release
BNCR home page
International Capital Markets Association homepage
FinDev Canada Home Page
Previous news from MicroCapital about FinDev Canada
More MicroCapital news on the IDB
Did you know that MicroCapital publishes the MicroCapital Monitor every month? Learn more at https://www.microcapital.org/products-page/.
- MICROCAPITAL BRIEF: IDB Invest, DFC, FinDev Canada $390 million loan to Davivienda de Colombia for SMEs, environmental sustainability, women
- MICROCAPITAL BRIEF: Banco W issues a $40 million “social bond”, funded by IDB Invest to promote gender equity in Colombia through microfinance
- MICROCAPITAL BRIEF: BizCapital, Fintech promoting SMEs in Brazil, raises $15 million in equity
- MICROCAPITAL BRIEF: KfW, BMZ invest $47 million in farmers and processors in Africa and Latin America through debt fund managed by Incofin: Agri-Finance Liquidity Facility
- MICROCAPITAL BRIEF: AfDB Raises $20 Million Through Bond Issuance in Kazakhstan to Support Otbasy Bank’s Home Loans to Women, Mainly in Rural Areas