Sicredi, a Brazilian cooperative financial institution with 5.5 million members, announced it has tapped $100 million (about BRL 500 million) to launch a credit line to finance micro, small and medium-sized businesses (SMBs) led by women.
The funds came from International Finance Corporation (IFC), the World Bank‘s investment arm, BNP Paribas, and Sumitomo Mitsui Banking Corporation (SMBC). Sicredi has been an IFC client since 2013 and this is the sixth deal between the two institutions.
The $100 million credit line will be targeted at SMBs with annual sales of up to BRL 6 million and which have women holding more than 50% of the company. The credit line is expected to reach between 15,000 and 20,000 female Brazilian entrepreneurs.
According to Sicredi, the need for credit in this segment has grown: in January 2021, the cooperative bank provided BRL 260 million in loans to women-led SMBs; in December, this amount reached BRL 508 million. Sicredi provided credit to more than 50,000 female entrepreneurs last year. The institution currently manages a credit portfolio of almost BRL 6 billion for the segment. The businesses with the greatest demand for loans are retail and services, such as clothing stores and hair salons, mini grocery stores and restaurants.
Cesar Bochi, Sicredi’s executive director, said that the initiative was conceived considering the gender factor as criteria for the use of resources and that this funding reinforces the cooperative’s commitment to the ESG agenda. This is the second thematic funding with the IFC – the first was a $120 million credit line for solar energy projects by the cooperative’s members throughout Brazil.
“We hope this initiative will boost many women-led businesses and also generate more economic growth for their communities,” he said.
“This initiative is in line with the IFC’s strategic objective of promoting sustainable and inclusive economic growth. We are also enhancing our role in helping bring investors to the Brazilian private sector, expanding Sicredi’s relationship base,” added Carlos Leiria Pinto, IFC general manager in Brazil.
Also according to Sicredi, the new credit line contributes to the 2X Challenge – Finance for Women, a global challenge launched by G7 development finance institutions in order to allocate resources to generating entrepreneurial and leadership opportunities for women in emerging countries. The challenge seeks to provide more than $15 billion in new financing for women entrepreneurs in 2021 and 2022.