Social fund of the year, Latin America: IDB Invest
IDB Invest provided $40 million to a private investment fund in Chile seeking to improve funding access for local micro, small and medium enterprises (MSMEs).
Fondo de Inversión Privado Sartor MHE was issued a warehouse line of credit to purchase and accumulate endorsable mortgage loans originated by Creditú Administradora de Mútuos Hipotecarios, part of Avla, a global insurance group, and insured by Avla, for a future asset backed securitisation (ABS) in the Chilean local capital markets. The line is expected to support several securitisation cycles and has a maximum availability period of six years.
The warehouse facility will support and improve MSMEs' access to financing in Chile through a credit insurance product that Avla offers to its MSME clients, which allows them to access more competitive funding costs. The financing is expected to allow for more favourable terms and more efficient loan structures for the borrowers.
The development bank said it hopes the project will support several future MSME loan ABS issuances, with the aim to create a new asset class in the Chilean capital markets that eventually contributes to the allocation of institutional money for MSMEs.
This transaction contributes to three UN Sustainable Development Goals (SDGs): Decent work and economic growth (SDG 8); Industry, innovation and infrastructure (SDG 9); and Responsible consumption and production (SDG 12).