EIB and ADOPEM sign EUR 7 million loan to support Dominican micro-entrepreneurs
The European Investment Bank (EIB) and Banco de Ahorro y Crédito ADOPEM signed a loan in Dominican pesos worth 7 million euros (around 480 million DOP) to support micro-entrepreneurs. The loan will help meet the working capital and investment needs of businesses affected by the COVID-19 outbreak in the Dominican Republic, targeting women and very low-income borrowers in the country.
The loan is part of the EIB’s contribution to Team Europe’s response to the COVID-19 crisis and will support gender equality and female entrepreneurship in the Dominican Republic, while qualifying for the 2X Challenge. The 2X Challenge is a leading initiative that deploys and mobilizes capital to empower women and improve their economic participation in emerging markets. The EIB loan to ADOPEM will support 27,000 loans, of which 18,000 will be granted to female borrowers.
EIB Vice-President Ricardo Mourinho Félix, Head of Latin America, said: “Strengthening support for small businesses helps boost private sector development, productivity and job creation. We are delighted to partner with ADOPEM to help microenterprises affected by the COVID-19 pandemic while helping to promote gender equality by improving access to credit for women-led businesses in the Dominican Republic. . and throughout the region of Latin America and the Caribbean “.
Mercedes Canalda de Beras-Goico, Executive President of ADOPEM said: “This new agreement has a scope of implementation throughout the national geography, to support different parts of rural and urban areas in various sectors”.
EIB support for microfinance in the Dominican Republic
The EIB has been active in the microfinance sector in the Dominican Republic since 1992 and is now recognized as a leading institution among all international financial institutions supporting the sector. The Bank has granted several loans to several microfinance institutions: Banco Ademi, ADOPEM, Banfondesa, Fondesa, FUNDAPEC and FDD.
The EIB has also contributed to the capital of these institutions during their phases of transition from NGO status to that of regulated savings and credit unions.
A long-term relationship between the EIB and ADOPEM
First an NGO in 1982 to finance women borrowers, ADOPEM has grown to become a commercial bank dedicated to microfinance for the unbanked or financially underserved. ADOPEM’s social mission to promote financial inclusion among disadvantaged communities is supported by very small loans. 70% of its clients have no credit history and ADOPEM is their first point of entry into the formal financial system.
The EIB has been supporting ADOPEM since 2006 through several loans, as well as an equity investment. This partnership has allowed ADOPEM to grow and attract international investors with social objectives, in particular the BBVA Microfinance Foundation – the current majority shareholder and main investor for financial inclusion in Latin America.
The EIB in Latin America
The EIB, the Bank of the European Union, is the largest international financial institution in the world and around 10% of its lending and financing target is for the benefit of partners outside the European Union.
The EIB provides economic support to projects in Latin America by facilitating long-term investments on favorable terms and providing the technical support necessary to ensure that these projects produce positive social, economic and environmental results. Since the EIB began operating in Latin America in 1993, it has provided total financing of EUR 10.4 billion to support 139 projects in 14 countries in the region.