48304 - Finanzauto Loan

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Summary of Investment Information

Project Number

48304

Company Name

FINANZAUTO S.A. BIC

Date SPI Disclosed

Jul 15, 2024

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Aug 15, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 4, 2025

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Oct 30, 2024
Signed : Oct 30, 2025
Invested : Dec 2, 2025

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The proposed investment consists of a US$70 million senior secured loan to Finanzauto S.A. BIC (Finanzauto or the Company), a company that operates in Colombia providing financing options for the purchase of vehicles to individuals and micro, small and medium enterprises (MSMEs). The proceeds of the loan will support the Company in increasing access to finance for certain segments of the population that remain underserved, specifically: (i) MSMEs and independent and self-employed individuals involved in productive activities(ii) WMSMEs, (iii) women, and (iv) climate-smart projects, in the form of Hybrid and Electric Vehicles (HEVs) (the “Project”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.0
Equity

Development Impact

Stakeholder effects - Access to finance for MSMEs and WMSMEs. The proposed project aims to increase access to finance for MSMEs and WMSMEs in Colombia. The MSME financing gap in the country is estimated at US$38.6 billion or 13% of GDP. By increasing access to finance for MSMEs, including WMSMEs, IFC expects the project to help reduce this financing gap. Stakeholder effects - Access to climate finance. IFC expects the project to increase access to climate finance through the financing of HEVs for individuals and MSMEs, thereby reducing GHG emissions in the country. Market creation effects - Competitiveness: The Project is expected to demonstrate the business opportunity of underserved MSMEs and WMSMEs to other lenders, leading to replication that will improve competitiveness through an increased supply of financial services and products to these underserved segments. Market creation effects - Sustainability: IFC expects the investment to promote greater environmental sustainability by scaling up the emerging green financing in the transport sector and by conducting HEV awareness activities for individuals and MSMEs.

IFC’s additionality through the Project will be both financial and non-financial. Financial additionality will be provided in the form of financing structure, as the loan will help Finanzauto diversify its funding sources, increase the average maturity of the Company’s funding and reduce its debt maturity gap, helping to improve its financing structure. Nonfinancial additionality will be provided in the forms of: (i) non-commercial risk mitigation, as IFC aims to work with Finanzauto to help mobilize up to US$20 million through the non-core mobilization from MCPP, (ii) resource mobilization, as IFC will play a key role in mobilizing up to US$30 million from institutional investors under IFC’s standard B Loan program; and (iii) standard-setting, as IFC is expected to help Finanzauto to enhance its ESMS.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a US$50 million sustainability linked-loan to Finanzauto S.A. ("Finanzauto" or "the Company"), a company that operates in Colombia providing financing options for the purchase of vehicles to individuals and micro, small and medium enterprises (MSMEs). The loan will be used to support the growth of the Company's sustainable hybrid and electric vehicle (HEV) portfolio and its micro, small and medium enterprise (MSME) portfolio in the women-owned and rural MSME segment (the Project). The E&S risks and impacts of the Project derive from the Bank's capacity to assess and manage the E&S risks associated with its pipeline. The Project will not support investments involving activities described in the IFC's exclusion list, companies involved in coal-related activities, or higher risk activities. The proposed pipeline -targets mainly auto-loans to individuals. The E&S impacts associated with the MSME portion will be mostly occupational health and safety (OHS) related and low to medium in nature. The Project has been categorized as FI-2, in accordance with the IFC’s Sustainability Framework.

Finanzauto has a corporate E&S management system that follows international sustainability standards and certifications such as UN Global Compact. It also follows international disclosure practices such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Global Report Initiative (GRI). In terms of E&S risk management, Finanzauto has an exclusion list in line with IFC’s, which is applied to the entire portfolio and evaluates legal requirements such as air emissions. The sustainability officer, who reports directly to the Company's compliance officer, is currently responsible for the operation of the corporate E&S management system and reporting requirements. Regarding the working conditions, while all Finanzauto’s policies and procedures are in line with PS 2 requirements, no explicit mentions to harassment at workplace and related procedures were identified. As part of the Project, the client will be required to: 1.) Design and implement a process to assess the MSME portion of the pipeline against applicable E&S legal requirements; 2.) Design and implement a categorization process to screen out higher risk activities; 3.) Submit annual monitoring reports; 4) Enhance human resource policy, and 5.) Disclose the ESMS.

S.no	Title	Anticipated Completion Date
1	Enhance ESMS	09/30/2024
2	Designate an E&S officer	09/30/2024
3	Enhance its HR policy and procedures	03/14/2025

Contacts

For Inquiries About the Project, Contact

Finanzauto
Santiago Cleves Bayon
Planning Director
+(57) 601 749 9000 Ext 530
santiago.cleves@finanzauto.com.co
Dirección Carrera 56 No. 9 – 17, Edificio Torre Américas, Oficina 501 Bogotá – Colombia
https://www.finanzauto.com.co/portal/

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