IDB Invest has provided $200 million in financing for Brazil’s Banco Sofisa S.A. (Sofisa), together with Proparco and FinDev Canada. The funds aim to support the expansion of Sofisa’s portfolio of small and medium-sized enterprises in the country. The project will increase the availability of stable long-term funding to support SMEs lending growth, while helping to improve the profile and maturity structure.

SMEs are of great importance to Brazil’s economy, with over 300,000 SMEs providing 39% of the country’s total jobs in 2020, but they face a severe financing gap, especially in cases of female ownership.

IDB Invest provided $50 million and mobilised $25 million from the China Fund for Latin America and the Caribbean, $30 million from Proparco and $20 million from FinDev Canada, the co-lenders. In addition, $75 million was mobilised through B loan participants.

IDB Invest, through its Advisory Services, together with Proparco and FinDev Canada will support the bank in developing a sustainable financing strategy to foster the effective adoption of financial solutions for the social and sustainable SME segment and build internal capacity to increase the number of women-led or women-owned SMEs in the portfolio.

This agreement can potentially contribute to three UN Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9) and Partnerships for the Goals (SDG 17).