Banco para la Comercialización y la Producción SA
BIO has signed a USD 15 M loan for Banco para la Comercialización y la Producción SA (BANCOP), a cooperative bank in Paraguay.
Amount
$ 15,000,000.00
Type of investment
Debt
Development impacts
- Local economic growth
- Private sector consolidation/innovation
- Promotion of ESG best practices
Beneficiary locations
Investment field
Financial Institutions
Activity
Organisation
Banco para la Comercialización y la Producción SA
Website
https://www.bancop.com.py/Domicile
Banco para la Comercialización y la Producción SA (BANCOP) is a cooperative bank providing financial services for other cooperatives, small to medium enterprises (SMEs) and rural producers. Its members are 27 production cooperatives operating in the agriculture, livestock and manufacturing sectors.
BANCOP opened its doors in 2012 in Asunción, the capital city. One year later, it opened several branches in busy manufacturing areas throughout Paraguay, enabling the bank to reach producers directly.
BANCOP's shareholders identified this underserved market and created the Bank to respond to these needs having in mind the importance of the productive sector in the Paraguayan economy and the need of providing adequate financial products with competitive conditions to the SMEs in the productive sector.
Despite its focus on SMEs, BANCOP is a universal bank and offers the full range of banking products to its clients including internet banking, credit cards, remittances, foreign trade services, etc. The principal loan products offered are business loans (special products for livestock and agriculture producers) and loans for cooperatives. BANCOP has developed specific products to finance agriculture and livestock activities having in consideration the unique cycle of the business and also the need of long term products to finance diverse needs (machinery, equipment, irrigation systems, acquisition of land, etc.).
Development impacts
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Local economic growth
The project consists of increasing access to financial products - credits, savings and payments services - for SMEs in the agriculture sector in Paraguay, by supporting a universal bank that aims to expand its SME portfolio (61% of its total portfolio) and increase the share of small enterprises. The bank has a unique focus on agricultural and livestock value chains (60% of its portfolio) that play a crucial role in the country's economic growth and job creation.
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Private sector consolidation/innovation
Consolidation and innovation of the private sector will be achieved through know how and technology transfer within the bank via regular trainings and a leadership program. The bank also has a market structuring effect by being a novelty type of institution operating on a niche market. Lastly, the bank also contributes to digitalization by deploying digital products and services to the market.
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Promotion of ESG best practices
Via this investment, BIO promotes an actor that has a best in class ESMS in the sector and that is willing to achieve high environmental and governance standards. BIO will have a strong additionality by further improving the client's ESMS.
E&S Impact
BANCOP will work to strengthen the E&S capacity of the bank to train Credit Analysts who will perform part of the E&S due diligence and to better understand the application of the IFC Performance Standards. The bank will develop legal covenants to include in the legal documents and explicit the bank’s E&S requirements. Furthermore, the bank will work to define an internal action plan to enhance its identification and mitigation of clients’ social risks and will extend its grievance mechanism to external stakeholders.
Situation at the time of investment
BANCOP has a comprehensive Environmental and Social Management System (ESMS) developed by a Technical Assistance of DEG in 2019. It is supported by dedicated tools, among which a satelite image monitoring system that allows verification of potential illegal deforestation and respect of national environmental permits.
Risk Category: A
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