Garrigues and Barros & Errázuriz advised on the deal
IFC, a member of the World Bank Group, provided $50 million loan to Caja de Compensación de Asignación Familiar Los Héroes, one of the largest cajas de compensación in Chile to help improve financial inclusion in the country.
This is the first international funding to a caja de compensación in Chile. IFC’s 5-year facility to Los Héroes will support the expansion of its social credit lending program to low-income workers and retirees.
Cajas de compensación, non-profit financial institutions focused on providing social security services, play a critical role in helping to reduce the access to credit gap in Chile. The Cajas system provides services to 7 million members including 5.6 million workers (nearly 63% of Chile’s economically active population) and 1.4 million retirees, and are the only institutions allowed to offer payroll loans in Chile. While the World Bank’s 2014 Global Findex Database indicates that 63 percent of the Chilean adult population hold an account with a financial institution, only 56 percent of the poorest 40 percent of Chile’s population have a bank account. This is well below other high-income OECD countries, where the bank account access indicator stands at 94 percent on average.
In the past five fiscal years, IFC invested almost $ 9 billions in the financial sector in the Latin America and the Caribbean region, in long-term investments, including mobilization. This financing to Los Heroes is part of IFC’s strategic focus on supporting local financial markets to achieve development impact. IFC aims to achieve this goal through the use of innovative financial products and mobilization, fostering micro, small and medium enterprises, encouraging corporate social responsibility, protecting natural resources through environmentally-sustainable business practices, and promoting business expansion into other emerging markets. For more information about IFC in Latin America and the Caribbean, visit www.ifc.org/lac.
Garrigues advised IFC with a team in Chile and Mexico including Pedro García Morales (Picture), Sofía Duralde, María Fernanda Jara, Mario Juárez and Paulina Bracamontes.
Barros & Errázuriz Abogados advised Los Héroes with Cristián Barros and José Miguel Diez.
Involved fees earner: Cristián Barros – Barros & Errázuriz Abogados; José Miguel Diez – Barros & Errázuriz Abogados; Pedro García Morales – Garrigues; Sofía Duralde Manns – Garrigues; Mario Juárez Noguera – Garrigues; Paulina Bracamontes Belmonte – Garrigues;