The International Finance Corporation (IFC), a member of the World Bank Group, announced a loan of $300 million to Banistmo, one of Panama’s leading financial institutions, to promote financing for small and medium enterprises (SMEs) and expand the offer of mortgage loans to the preferential segment.

The investment, which consists of USD 200 million for IFC’s own account and a USD 100 million mobilization package, will allow Banistmo to address two development challenges simultaneously. On the one hand, it will help reduce the financing gap for SMEs in Panama, estimated by IFC at 41 percent of GDP, and, in the process, boost their productivity. On the other, it will contribute to addressing the country’s housing deficit, which the authorities place at 175,000 homes.

“The development of an efficient and inclusive financial market is crucial in sustaining economic growth over the medium to long term as it helps create employment and economic opportunities for vulnerable segments, such as SMEs—above all, women-owned SMEs—and low-income households,” said Sanaa Abouzaid, IFC Regional Manager for Central America.

“This facility comes to strengthen the work that, inspired by our purpose of promoting sustainable development, we have been developing with SMEs, especially those led by women, in order to strengthen the productive scheme of our country, while also continuing to promote the construction of more sustainable cities and communities where access to decent housing can be within everyone’s reach,” said Aimeé Sentmat de Grimaldo, Executive President of Banistmo.

SMEs play a fundamental role in the Panamanian economy. With a presence throughout the territory, they represent 96 percent of the economic units and generate around 80 percent of employment in the country. However, over 32 percent of Panamanian SMEs reported being underserved or entirely unserved by financial institutions. This difficulty in accessing financing has contributed to a low level of productivity among small businesses.

Like many countries, Panama has seen a rise in demand for housing, driven by growing incomes and rapid urbanization. This has priced the low- to middle-income segment of the population out of the housing market and, currently, only 9 percent of adults in the country have a housing loan.

This new support from IFC to Banistmo, a client of the institution since 2014, aims to begin to change this reality.

About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.

About Banistmo
Banistmo is a leading financial institution with more than 45 years of presence in Panama. A company whose organizational purpose is to promote sustainable development to achieve the well-being of all, which is promoted through three action fronts aligned with the Sustainable Development Goals (OSD): Build more sustainable cities (SDG 4, 5 and 11), Strengthen the competitiveness of the productive scheme (SDG 8 and 9) and Promote financial inclusion (SDG 1, 4 and 5). Since 2013, is part of Grupo Bancolombia, a financial institution with 147 years of experience, recognized as one of the most sustainable banks in the world, with presence in 8 countries and listed on the New York Stock Exchange for 27 years. For more information, visit: www.banistmo.com.