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IDB Invest Facilitates Access to Financing for Affordable Housing in Panama and El Salvador

IDB Invest has provided $35 million worth of financing for Banco La Hipotecaria, S.A. and La Hipotecaria S.A. de C.V. The deal includes two loans through a revolving financial vehicle – $15 million for the former and $10 million for the latter – in addition to a $6 million in mobilized funds for BLHP and $4 million for LHES.

 

The transaction will increase access to affordable housing financing for low- and middle-income sectors in Panama and El Salvador, through the placement of mortgage loans by BLHP and LHES. These loans will then be used to guarantee future BLHP and LHES bond issues in the local and international markets.

 

The financial vehicle has a 9-year availability period, made up of three disbursement cycles, each with a three-year term. At the end of each cycle, La Hipotecaria will conduct an issuance in capital markets, backed by a mortgage portfolio, and the funds obtained will be used to repay the capital. Once repaid, the vehicle will once again be available for disbursements.

 

IDB Invest will provide advisory services to La Hipotecaria in order to develop a gender, inclusion and diversity strategy for the institution based on the gaps identified through the WEP tool (Women's Empowerment Principles Gender Gap Analysis Tool). The strategy will allow La Hipotecaria to take the necessary actions to improve its internal gender and diversity policies to attract, retain and develop talent. Likewise, IDB Invest will support La Hipotecaria with an impact assessment on the products offered by the financial institution and support it in developing internal capacities to measure its social impact.

 

This deal is expected to contribute to three United Nations Sustainable Development Goals (SDGs): Decent work and economic growth (SDG 8), Sustainable cities and communities (SDG 11) and Partnerships to achieve the goals (SDG 17 ).

This transaction is aligned with Panama’s and El Salvador’s efforts to expand access to credit for underserved sectors, increase financing for access to housing for vulnerable sectors, and develop inclusive and sustainable infrastructure services.  

 

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 BLHP and LHES

BLHP is a financial institution established in 1996 that offers mortgage loans, focused on middle- and lower-middle class clients. The loans are granted to salaried people who are financing the purchase of their main home. BLHP periodically securitizes its mortgage portfolio through the international capital markets. In 2003, BLHP decided to expand its operations to El Salvador by replicating its business model under an unregulated company by the name of La Hipotecaria, S.A. de C.V. and later, in 2011, it began operations in Colombia with a regulated entity called La Hipotecaria Compañía de Financiamiento. In 2010 the Superintendency of Banks of Panama granted the company a General Banking License. BLHP has a 99.9% stake in LHES, thus consolidating the operations in Panama and El Salvador. The owner of BLHP is La Hipotecaria (Holding) Inc., controlled by Grupo ASSA, owner of one of the most experienced insurers in Central America.