IDB Invest, Capital Bank Join Forces to Promote Panama’s SMEs
• IDB Invest's financial package includes technical assistance to develop a digital transformation strategy to support SMEs
IDB Invest, a member of the IDB Group, has granted an unsecured loan package of up to $52 million to Capital Bank Inc., to support small and medium enterprises (SME) in Panama that have been highly affected by the health and economic crisis triggered by the global pandemic.
The financing seeks to strengthen Capital Bank's capitalization and increase access to financing for the country's SMEs. The proceeds from this financing will be used to provide resources for working capital, capital investment and fixed assets to Capital Bank clients in the SME segment.
The transaction consists of a senior 5-year loan of up to $10 million, plus a subordinated loan of up to %20 million and a subordinated loan of up to $22 million, both with a 10-year term. For this latest loan, IDB Invest has mobilized resources from the Symbiotics and eco.business impact funds.
IDB Invest will also support Capital Bank with technical assistance services to identify the needs and opportunities of the bank and its SME clients in the provision and use of financial and non-financial digital solutions. Similarly, a digital transformation strategy will be developed for the bank, becoming the basis of a process to define the course of action for the expansion of digital services to SME clients.
This deal potentially contributes to three United Nations Sustainable Development Goals (SDGs): Decent work and economic growth (SDG 8), Industry, innovation and infrastructure (SDG 9) and Partnerships to achieve goals (SDG 17) .
About IDB Invest
IDB Invest, a member of the IDB Group, 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 $13.1 billion in asset management and 385 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 Capital Bank
Capital Bank, founded in January 2008, is a Panamanian capital bank. Capital Bank is positioned as a niche bank mainly focused on corporate and SME banking. The Bank provides a wide range of financial products and services, and additionally offers private banking, treasury and insurance services. Capital Bank focuses on local and international companies, and originally served large and medium-sized companies before it shifted to a greater focus on the SME segment. In the consumer segment, it focuses mainly on attracting deposits and private banking. The Bank's strategy is to maintain a constant growth pace in corporate loans and to expand its SME portfolio in coming years. The Bank expects to support this expansion in the digital transformation of its business and services offered, and in greater operational efficiency, both pillars of its 2021-2023 Strategy.
Symbiotics is the leading impact investing platform dedicated to financing micro, small and medium-sized businesses as well as low- and middle-income households in emerging and border markets. Since 2005, Symbiotics has structured and originated 4,000 transactions worth more than $6.5 billion, and invested in 490 companies in around 90 emerging markets. These investments have been acquired by more than 25 mutual funds and more than 50 specialized fund managers, which created an ecosystem and growing market for these types of transactions.
About the eco.business Fund
eco.business aims to promote business and consumer practices that contribute to the conservation of biodiversity, the sustainable use of natural resources, the mitigation of climate change and adaptation to its impacts. By providing financing for business practices that preserve nature and promote biodiversity, the fund seeks investments with both environmental and financial benefits. The fund primarily provides loans to qualified financial institutions that lend to eligible borrowers, including holders of recognized certifications or those making improvements in line with conservation and biodiversity objectives. The fund supports sustainable operations in the agriculture, fisheries (including aquaculture), forestry and tourism sectors. As an impact investment fund advised by Finance in Motion, the eco.business fund was started by Germany’s KFW Development Bank and Conservation International, with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ). It has also received donor support from the European Commission. The fund's additional investment base includes IDB Invest, a member of the Inter-American Development Bank (IDB) Group, the UK government's Department for Environment, Food and Rural Affairs, the Dutch development bank FMO, Austrian bank of development OeEB, and institutional investors such as sustainable banking institution ASN Bank, German ethical bank GLS Bank, Calvert Impact Capital, and Raiffeisen Bank International. Finance in Motion, a leading impact investing company, is also an investor. Operating hand in hand with development banks, eco.business provides high impact technical assistance for financial institutions and end borrowers.