FIMBank plc - IFC Loan and BRASILFactors

On 20 April, FIMBank plc held a press conference announcing a USD60 million loan agreement with the International Finance Corporation, a member of the World Bank Group. The agreement enables FIMBank to ensure that its client companies in the Middle East and Africa can import the production materials and machinery they need to grow their businesses. The USD60 million loan agreement will help FIMBank to finance trade transactions for emerging market firms in consumer goods, small machinery, raw materials and components. FIMBank’s President Ms Margrith Lutschg-Emmenegger explained that the funds from the IFC will be used to support trade in emerging market countries and help contribute to growth in major sectors of their economies. The President stated “We appreciate the backing of partners such as IFC, whose ongoing support signals an important vote of confidence in the FIMBank Group and its activities.”

This deal, which consists of a USD15 million IFC senior loan and USD45 million from the Saudi Fund for Development (which will be administered through an IFC trust fund), will enable FIMBank to finance at least 60 trade transactions. 20 of these transactions are expected to be in the poorest Middle East and North-African (MENA) countries.

Moreover, on 21 April, FIMBank plc issued a press release confirming that it has reached an agreement with the International Finance Corporation (IFC) and BICBANCO (a Brazilian Bank) to set up a new factoring joint venture in Brazil named BRASILFactors. FIMBank and BICBANCO will both hold 40% of the new joint venture with the remaining 20% to be taken up by the IFC. BRASILFactors will be offering domestic and cross border factoring and complementary services to Brazilian corporates and small and medium enterprises (SMEs).

The IFC has been a shareholder in FIMBank since 2005 and is also a joint-venture partner in FIMBank’s FactorRus and Egypt Factors joint-venture funds.

BICBANCO, one of the oldest private sector banks in Brazil, was founded in 1938 by the Bezerra de Menezes Financial Group which remain as the major shareholders till the present day. BICBANCO focuses on credit operations to the middle market segment and is ranked as the fifth largest private capital national bank in Brazil.  FIMBank’s President, Ms Lutschg-Emmenegger said that BRASILFactors is expected “to develop rapidly and become a significant player in a market which offers excellent opportunities”.

In an interview with FIMBank’s President published in the local media on 24 April, Ms Margrith Lutschg-Emmenegger expressed her satisfaction in closing both deals as these continue to support the Group’s growth strategy. Moreover, Ms Lutschg-Emmenegger stated that FIMBank’s exposure to Libya is very manageable and well under control as all transactions related to Libya are short-term and guaranteed by financial institutions which will cover their international obligations to maintain their reputation in the global financial markets. The President also indicated that the FIMBank Group expects a challenging year ahead with increasing pressure on profitability and growth.