50414 - Agricola Debt II

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Summary of Investment Information

Project Number

50414

Company Name

BANCO AGRICOLA S.A.

Date SPI Disclosed

Jun 3, 2025

Country

El Salvador

Region

Latin America and the Caribbean

Projected Board Date

Jul 4, 2025

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Aug 25, 2025

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Jul 25, 2025
Signed : Aug 15, 2025
Invested : Aug 22, 2025

Sector

Commercial Banking - General

Project Description

The proposed investment consists of a US$200 million financing package to Banco Agricola S.A. in El Salvador, composed of: 1) an up to US$115 million senior unsecured “A” loan for IFC's own account (IFC A Loan), to be committed in one single tranche; and 2) an up to US$85 million senior unsecured “B” Loan (B Loan), split into two tranches: (i) tranche 1: up to US$35 million, to be committed at the moment of the IFC A Loan commitment; and (ii) tranche 2: up to US$50 million, to be committed within up to 18 months after Tranche 1.

Associated Advisory Engagement

IFC expects to continue supporting Banco Agricola in enhancing its product offering through an ongoing advisory project focused on developing specific solutions for sole proprietors and informal SMEs with a gender angle.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	115.0
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	Loans to SME Borrowers
Straight Senior Loan	Loans to Woman-Owned SMEs
Syndications	Loans to SME Borrowers
Syndications	Loans to Woman-Owned SMEs
Syndications	Loans to SME Borrowers
Syndications	Loans to Woman-Owned SMEs

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

Development Impact

Stakeholder effects – Increased access to informal SMEs and sole proprietors, including women and Silver Customers: informal enterprises in El Salvador account for approximately 21.4% of the country's GDP and around 67.45% of the total employed population. However, because traditional financial institutions typically require formal registration, collateral, and credit history, informal firms have very limited access to credit, relying on informal sources or microfinance institutions and credit cooperatives. The Project will support Banco Agricola in increasing lending to this segment. The Bank will leverage digital banking solutions and innovative lending models that cater specifically to informal SMEs. By integrating these businesses into the formal financial system, Banco Agricola not only supports their long-term sustainability but also contributes to broader economic development. Stakeholder effects – Increased access to finance for SMEs, including women SMEs (“WSMEs”): IFC anticipates that the Project will improve access to finance for SMEs in El Salvador. Based on the World Bank’s 2023 Enterprise Survey for El Salvador, 15.7% of all firms and 19.5% of small firms consider access to finance as a major or severe obstacle. WSMEs have larger financing gaps than their male-owned peers. They tend to be smaller, less likely to have a savings account, and face a higher cost of credit. Banco Agricola will enhance its new SME and digital strategies and digitizing its SME product lines with the aim of increasing the Bank’s lending to the SME segment. At the market level, IFC anticipates that the Project will enhance competitiveness in El Salvador’s financial market by addressing inclusion disparities, with a particular focus on empowering SMEs, informal SMEs, and sole proprietors. Banco Agrícola has set an ambitious goal to expand its offerings for informal SMEs and sole proprietors, with a strong emphasis on supporting women and silver economy entrepreneurs.

IFC’s additionality through the Project is both financial and nonfinancial. Financial additionality will be provided in the forms of financing structure, as IFC will provide longer-term funding which is not readily available in El Salvador. Nonfinancial additionality will be provided in the form of knowledge, innovation, and capacity building, as IFC will provide advisory services to support Banco Agricola in developing specific solutions for sole proprietors and informal SMEs with a gender angle.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Value of Outstanding Loans, SMEs	USDMill		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Value of Outstanding Loans, SMEs	USDMill	Volume of outstanding Informal SMEs/ Sole Proprietors loans.	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

E&S Category Rationale / Risks and Mitigation

The proposed Project consists of a financing package to Banco Agricola S.A. (Bancoagrícola or the Bank) in El Salvador to support the growth of the Bank’s loan portfolio for formal and informal small SMEs and sole proprietors. The E&S risks associated with these sectors are considered low to moderate and therefore, the Project has been categorized as FI-2 in accordance with IFC’s Sustainability Policy. The main E&S risks and impacts of this Project relate to the ability of Bancoagrícola to conduct adequate E&S due diligence and monitoring to identify and manage the E&S risks associated with the activities of the portfolio companies in line with IFC’s policy requirements. These risks are typically associated with labor and working conditions, occupational health and safety, pollution prevention and waste management. Bancoagrícola is an existing client with satisfactory E&S performance. As part of the Project, Bancoagrícola will maintain its ESMS. The Bank has adequate Human Resources (HR) policies, which are in line with IFC Performance Standard 2 (IFC PS 2) on Labor and Working Conditions, and adequate life and fire systems. Bancoagrícolahas a set of policies addressing Sexual Exploitation, Abuse, and Harassment (SEAH), along with an internal grievance mechanism to handle related complaints. Additionally, the organization upholds a Code of Ethics and provides an ethics hotline through which such complaints can also be reported.

The Project’s applicable requirements are the IFC Exclusion List, E&S laws in El Salvador. Bancoagrícola will not support SMEs involved in coal-related activities and higher risk transactions such as (a) involuntary resettlement, (b) risk of adverse impacts on Indigenous Peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, (d) risk of retrenchment or (e) significant occupational health and safety risks to employees. The Bank will also continue implementing labor and working conditions in line with IFC PS 2 and maintain its life and fire safety system.

S.no	Title	Anticipated Completion Date	Status
1	Improvements to the ESMS	07/11/2025	Completed

Contacts

For Inquiries About the Project, Contact

Banco Agricola S.A.
Mauricio Rivas
Manager of International Banking
+503 7729-3840
MaurRiva@bancoagricola.com.sv
Edificio San José de la Montaña, Boulevard Constitución N. 100, San Salvador, El Salvador.
https://www.bancoagricola.com/

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