announced its intention to be a shareholder in Caja Huancayo to expand financial inclusion in Peru, which will be achieved through the conversion of the current loan of S/57.14 million (approximately US$15 million) to an equity investment in Caja Huancayo.

“The microfinance industry has been the fundamental axis in helping to close the financing gaps for micro, small and medium-sized enterprises (MSMEs), especially those located far from urban centers. “The Municipal Savings and Credit Banks (CMAC) are the most important sector of the Peruvian microfinance industry, and historically they have played a fundamental role in the financial inclusion of Peru, especially in peri-urban areas, secondary populations and the rural sector,” says IDB Invest.

Municipal Savings Banks are regulated by a special legal framework, different from that governing private microfinance institutions and the banking sector; However, CMACs have managed to position themselves in segments where traditional banking has less presence.

Likewise, it should be noted that the modification of the Municipal Savings Law in 2017and subsequent changes, allowed the entry of strategic partners, such as IDB Invest, into the shareholding of municipal savings banks.

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“IDB Invest is established as the first multilateral and the first entity to invest in capital in the CMAC system since the change of Law, supporting Caja Huancayo’s focus on MSMEs and vulnerable populations. “In this way, it strengthens the capital of the Fund to leverage the growth of its loan portfolio, and in this way promote greater financial inclusion in Peru.”he points out.

With the participation of IDB Invest, Caja Huancayo continues to strengthen its corporate governance system, through an action plan structured with international standards and best practices in the matter. Likewise, IDB Invest will contribute to a roadmap to strengthen the Environmental and Social Management System (SGAS).

Caja Huancayo will receive advice from IDB Invest thanks to the support of the Women Entrepreneurs Financing Initiative (We-Fi), for the development of an impact measurement system integrated into credits and financial services. You will also receive support in the design of a gender and diversity strategy through a value proposition for the segment of MSMEs led by women.

The operation is also expected to contribute to the following United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Gender Equality, Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Reduce inequalities (SDG 10), and Responsible production and consumption (SDG 12).

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