The project consists of a long-term credit line of US$10 million to Banco Interfin ("Interfin" or "the Bank") for on-lending to small and medium-size enterprises (SME) for the financing of expansion and modernization of projects. A portion of the loan can be used by Interfin''s leasing affiliate, Arrendadora Interfin to finance equipment purchase for lease contracts.

The proposed project would be a repeat investment, following a US$5 million credit line extended by IFC to Interfin in 1993. The earlier credit line was used to finance 18 SMEs and the project achieved its main objectives of providing Costa Rican SMEs with much needed long-term funds to finance modernization and expansion.
This project will further these goals and also help Interfin enhance its corporte finance capabilities. Although Costa Rica has fared better than most of its Central American neighbors, long-term financing is still scarce and funding available to small and medium-size enterprises is usually of a short-term nature. Meanwhile, as is the case in the Central American region or in other small-scale economies, small and medium size companies play an important role in the Costa Rican economy as jobs and income providers.

The portion of the credit line used by Arrendadora will help develop the nascent Costa Rican leasing industry.