IDB Invest and Banco Pichincha Partner to Issue the First Gender Bond in Ecuador
- This will be the first issuance of a social gender bond with incentives linked to achieving objectives in the country.
- The social bond, issued by Banco Pichincha, will increase access to credit for women-led MSMEs in Ecuador.
IDB Invest and Banco Pichincha announce the issuance of the first gender bond in Ecuador for $100 million. The issuance is subscribed by IDB Invest for $50 million and by IFC for $50 million.
Banco Pichincha will use the funds from the bond placement to finance the growth of its women-led micro, small and medium-sized enterprises (MSMEs) portfolio. The bond will also promote the financial inclusion of women, providing credit for capital investment or working capital. It will also contribute to the development of Ecuador’s capital market, offering new sources of funding and developing thematic bonds in Ecuador.
The deal is supported by the Women Entrepreneurs Financing Initiative (We-Fi), an alliance that aims to expand financing and access to financial markets for businesses that are owned or led by women. Through this initiative, IDB Invest will provide the issuer with advisory services and a monetary bonus subject to achieving objectives related to Banco Pichincha’s women-led SME portfolio.
The purpose of the gender, diversity and inclusion advisory services that IDB Invest will provide is to develop a value proposition focused on meeting the needs of women-led MSMEs in the agricultural sector, especially Afro-descendant and indigenous women in Ecuador.
Additionally, as part of the bond issuance, IDB Invest has advised Banco Pichincha on the design of the methodological framework for the use of funds, which contains the criteria for the selection, monitoring and evaluation of projects, aligned with the Social Bonds Principles of the International Capital Markets Association (ICMA). Banco Pichincha obtained an independent verification of the methodological framework, known as a second-party opinion, issued by V.E. (Moody's ESG Solutions company), an external consultant specializing in this type of project.
The issuance of this social gender bond underscores IDB Invest's commitment to strengthen and support access to financing for MSMEs, guaranteeing access and financial opportunities for women in Latin America and the Caribbean.
This deal is expected to contribute to five United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Gender Equality (SDG 5), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9) and Reduced Inequalities (SDG 10).
About IDB Invest
IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $14.8 billion in asset management and 376 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Banco Pichincha
Banco Pichincha, the leading financial institution in Ecuador, manages assets of $13.4 billion, equivalent to 25.6% of the banking system as of December 2021. After nearly 116 years in the market, Banco Pichincha has grown from its origins as a local bank to become an international financial company with presence in five countries.