Banco Guayaquil
BIO has granted a USD 20 M loan to Banco Guayaquil, an Ecuadorian universal bank.
Amount
$ 20,000,000.00
Type of investment
Debt
Development impacts
- Local economic growth
- Private sector consolidation/innovation
- Fight against climate change
- Gender
- Financial additionality
Beneficiary locations
Investment field
Financial Institutions
Activity
Banco Guayaquil is a longstanding Ecuadorian universal bank with a century of experience, a robust track record and a significant MSME portfolio, surpassing 30% of its total holdings. With a broad presence in all provinces, it competes for second place in Ecuador's banking industry, accounting for 12% of total assets, and exhibits promising growth prospects driven by its strong commitment to digitalisation.
Banco Guayaquil is a well-known client of BIO, having already received a USD 15M loan in 2019, fully repaid by May 2023, and fruitful collaborations on TA initiatives, including recent ones focused on gender and climate. The proposed facility, arranged by CAF, with BIO and Proparco as parallel lenders, aims to support this growth, with 40% earmarked for green projects, such as energy efficiency and renewable energy projects, in line with the bank's sustainability objectives.
Development impacts
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Local economic growth
Banco Guayaquil contributes to local economic growth by providing essential financial services to individuals and businesses, facilitating access to capital and credit. The bank's lending activities, especially to the productive sector, stimulate business expansion and job creation. Additionally, Banco Guayaquil's support for SMEs, its core business market, fosters entrepreneurship and economic development.
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Private sector consolidation/innovation
Supporting the Ecuadorian bank with the most extensive financial services network, as well as its unique "Bancos del Barrio" outreach mechanism. More generally, BG appears as a digitalisation pioneer in Ecuador's banking sector, with 75% of savings accounts and 80% of consumer loans processed digitally thanks to BG's top-ranked online and mobile banking platforms that provides extensive services, including account openings, deposits, transfers, and loan processing.
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Fight against climate change
Directed funding with 40% of BIO's use of funds to green loans - aligned with BG's green bond criteria - targeting the offer of financial products for energy efficiency, renewable energy, environmentally sustainable agriculture and infrastructure related companies. Furthermore, BG will improve its climate governance and accountability through the finalisation of its Climate Change Strategy that has been developed thanks to BIO's BDSF support and will include assessment of climate change physical risks and opportunities, reporting Scope 3 emissions, defining a Science Based Targets initiative (SBTi), and joining the Net Zero Banking Alliance.
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Gender
2X eligible on governance and accountability, entrepreneurship - 55% of women ownership - and employment - 54% of women in the workforce and several quality indicators beyond compliance (including gender lens in HR-related policies and attention to gender pay gap) - dimensions, as well as on the indirect criteria with 45% of women clients and, more importantly, 60% of BIO's use of funds directed towards 2X eligible clients.
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Financial additionality
Providing access to longer financing terms than locally available, thereby enabling BG to offer longer term financing to its customers - crucial during times of poor local market liquidity
Contributing to improving the bank's asset/liability management
Further mobilising private sector capital
E&S Impact
BIO and Banco Guayaquil agreed on a series of actions to strengthen the current E&S process of the bank. These include the hiring of a second E&S coordinator, trainings to the teams, update the current ESMS manual, development of legal clauses for clients and extension of the grievance mechanism to external stakeholders, among others.
Situation at the time of investment
Banco Guayaquil has developed an ESMS in 2020 with the support of an external consultant, as requested by BIO’s ESAP of 2019. It has hired a dedicated person in charge of reviewing E&S risks, and has a team in charge of overall Sustainability topics. It has developed an E&S policy, a Human Rights policy and a Climate Change policy. Working conditions have been assessed as being aligned to the requirement of the IFC Performance Standard 2.
Risk Category: A
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