The project objective is to increase access to finance for Microenterprises and Individual Microenterprises startups from the base of the pyramid (BoP) in the state of Minas Gerais (MG) Brazil, through application of an innovative credit methodology developed by the Entrepreneurial Finance Lab (EFL) which helps to overcome the market failure that prevents them from accessing business credit lines. To support the project objective, the Opportunities for the Majority Initiative (OMJ) will enter into a US$10 million risk-sharing facility (RSF) (or its equivalent in Brazilian Reais) with Banco de Desenvolvimento de Minas Gerais (BDMG), the development bank of the state of MG. With the RSF, BDMG will launch a new financing program for ME startups, and be the first bank to apply the EFL methodology in Brazil, as it seeks to broaden the base of eligible clients for business start-up financing.
Project Detail
Country
Brazil
Project Number
BR-L1563
Approval Date
September 10, 2013
Project Status
Closed
Project Type
Loan Operation
Sector
FINANCIAL MARKETS
Subsector
FINANCIAL INCLUSION
Lending Instrument
BID Invest
Lending Instrument Code
IIC
Modality
PSL (Private Sector Loan)
Facility Type
-
Environmental Classification
-
Total Cost
USD 9,231,987.00
Country Counterpart Financing
USD 0.00
Original Amount Approved
USD 9,231,987.00