44536 - LH LAC III

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Summary of Investment Information

Project Number

44536

Company Name

LA HIPOTECARIA (HOLDING) INC

Date SPI Disclosed

Nov 18, 2020

Country

Central America Subregion

Region

Latin America and the Caribbean

Projected Board Date

Jan 4, 2021

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Apr 30, 2026

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Mar 2, 2021
Signed : Jun 18, 2021
Invested : Sep 3, 2021

Sector

Commercial Banking - Housing Finance

Project Description

The proposed investment will provide a senior secured loan (IFC Loan) of up to US$50 million to Banco La Hipotecaria, S.A., (LH Panama), La Hipotecaria, S.A. de C.V. in El Salvador (LH ES); and La Hipotecaria Holdings Inc. (LH Holding), in British Virgin Islands (together “LH” or the ”Company”), as co-borrowers, aimed at supporting the residential mortgage lending to low-and-middle-income sectors in Panama and El Salvador. Up to US$25 million will be insured through the MCPP II Facility and 50 percent of the proceeds will be used to finance women mortgages (the Project).

Associated Advisory Engagement

IFC will implement an upfront training workshop with LH to improve its awareness about the importance of having a gender value proposition.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Finance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant, expected Project-level outcome is increased access to mortgage including for low- to middle-income individuals in Panama, and increased access to mortgage in El Salvador. Fifty percent of IFC's use of proceeds will be earmarked to support women-headed households. Beyond the Project, IFC anticipates that the investment will promote greater gender inclusion in these markets through competitive pressure and the demonstration and replication channels.

IFC will provide financial additionality through the financing structure and non-financial additionality in the form of knowledge, innovation, and capacity building, helping to continue supporting LH as it evolves its business model and funding sources. IFC's financial additionality is based on the form of long-term financing, which is currently not readily available through capital markets financing. Since the first engagement in 2005, IFC's support for LH has evolved from the first senior loan to LH Panama to an equity investment in LH Holding. In terms of knowledge sharing, IFC will implement a training workshop with LH to improve their awareness about the importance of gender value proposition.

E&S Category Rationale / Risks and Mitigation

The proposed project consists of a US$ 50 million regional housing finance facility to Banco La Hipotecaria S.A. in Panama and La Hipotecaria S.A. de C.V. in El Salvador to support mortgage financing focused on individuals only. The Environmental and Social (E&S) risks and impacts inherent to the proposed investment are low in nature. Consequently, this investment has been categorized as FI-3 in accordance with IFC’s Sustainability Framework. La Hipotecaria group is an existent client with satisfactory performance. The key E&S risks on this project are limited given the focus on personal financing. For this project, La Hipotecaria S.A. Panama and La Hipotecaria S.A. de C.V. El Salvador will be required to enhance their Human Resource and Credit Collection policies by applying good industry practices and align their human resource practices with the IFC Performance Standard 2 “Labor and Working Conditions”. The Banks will submit a Life and Fire Safety report on an annual basis.

Given the E&S risk nature of this project, development of a robust ESMS was not needed.

Contacts

For Inquiries About the Project, Contact

Banco La Hipotecaria, S.A.
Giselle De Tejeira
Vicepresidente Ejecutivo - Finanzas
(507) 300-8500
gtejeira@lahipotecaria.com
Vía España, Plaza Regency, Ciudad de Panama
Websitewww.lahipotecaria.com

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