Language for Financing the Circular Economy in Peru

The IDB Group (IDB Invest and IDB) has forged a strategic alliance with the Federation and the Credit Unions to assess the true state of circular financing in the country.

Leveraging the key takeaways from the Colombian experience, and engaging with multiple stakeholders, the Circular Economy Categorization System was developed.

The categorization system promotes transparency through a common language, while facilitating the financing process by empowering credit advisors and commercial teams with simple tools, such as inclusion filters.

The filters capture the characteristics of the circular project through a set of simple questions, which are later categorized, evaluated, and financed.

This initiative leverages circular development in MSMEs, by including proportionality criteria to capture and develop impact indicators, placing greater responsibility on the anchor company, and adapting the inclusion filters that gather MSME business data.

The tool, therefore, seeks to drive financing for MSMEs with circular practices or models in place.