Testing new savings incentives
In Paraguay, where fewer than 22 percent of people report having a bank account and fewer than 10 percent save through a financial institution, Banco Familiar is encouraging customers to put their smart phones to use in banking. Working with IDB Invest, the bank—which serves primarily middle and low-income populations—is testing different types of text reminders and purpose-built apps to help customers estimate their personal cash flow or set savings goals for specific needs or contingencies. By assigning these tools randomly, Banco Familiar and IDB Invest can assess which are most effective and should be offered to all customers.
The proposed operation includes: a partial credit guarantee of up to 28.5 billion Guaraníes (“PYG”) to be issued in favor of the Instituto de Previsión Social (“IPS”). IPS will provide a loan in Guaraníes to Banco Familiar S.A.E.C.A. (the “Loan”) for up to PYG27 billion, and the Inter American Investment Corporation (“IIC”) will grant a guarantee in favor of IPS covering the credit risk of Banco Familiar (“Guarantee”) under the Loan. The IPS disbursement will be made through a Trust Manager, Agencia Financiera de Desarrollo, through whom IPS will receive payments for the Loan. The Loan will have a term of up to five years, with a grace period of up to two years, and semi-annual amortization. The use of funds for the Loan will be to finance small and medium enterprises (“SMEs”) in the productive sector of Paraguay.