Summary of Proposed Investment
Project Number
11158
Company Name
Latin American Agribusiness Development Corporation
Date SPI Disclosed
Oct 31, 2001
Country
Latin America and the Caribbean Region
Industry
other
Projected Board Date
Dec 5, 2001
Status
Active
Sector
Development Finance Company
Department
Gbl Ind, Manufact, Agribus & Services
Environmental Category
FI
Previous Events
Approved : Dec 21, 2001
Signed : Feb 8, 2002
Invested : Feb 21, 2002
Project Description
Incorporated in Panama in 1970 with US$2.4 million in equity, LAAD started lending in Central America. Subsequently, it expanded also to South America and the Caribbean, disbursing in excess of US$375 million to over 750 agribusiness projects in 16 countries. LAAD is one of the very few, or possibly the only, financial institution targeting exclusively the agricultural sector and doing it on a profitable basis for almost thirty years. According to company estimates, the projects it financed during these three decades created 65,000 jobs and generated US$450 million in foreign exchange earnings annually.
The 8-year credit line will provide financing to private Latin American and Caribbean companies engaged in agriculture, livestock, fishing and forestry. In light of the lack of long term financing available to this sector, the project will have the following development impact:
IFC’s proposed financing will enable LAAD to offer long-term funds to selected clients who need it for the success of their enterprises, but can not obtain it due to the current five-year maximum tenor of LAAD''s commercial funding. The on-lending will be made to small and medium size export agribusiness firms operating out of South and Central America and the Caribbean. The loans will average US$400,000.
This project will enable IFC to make one of its first experience in the difficult field of rural finance and possibly replicate the model, or apply the lessons learnt to future projects in this and other regions. Finally, IFC is expected to make a positive contribution to environmental practices in the agribusiness field.
The 8-year credit line will provide financing to private Latin American and Caribbean companies engaged in agriculture, livestock, fishing and forestry. In light of the lack of long term financing available to this sector, the project will have the following development impact:
- Provide long-term, possibly fixed rate financing to this sector;
- Reduction of rural poverty through job creation in rural and semi-rural areas;
- Increase and higher quality of agricultural output through the ability to purchase, on credit, the required quality inputs;
- Demonstration effect of the viability of an institution such as LAAD, that can possibly be replicated in other regions.
IFC’s proposed financing will enable LAAD to offer long-term funds to selected clients who need it for the success of their enterprises, but can not obtain it due to the current five-year maximum tenor of LAAD''s commercial funding. The on-lending will be made to small and medium size export agribusiness firms operating out of South and Central America and the Caribbean. The loans will average US$400,000.
This project will enable IFC to make one of its first experience in the difficult field of rural finance and possibly replicate the model, or apply the lessons learnt to future projects in this and other regions. Finally, IFC is expected to make a positive contribution to environmental practices in the agribusiness field.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Oscar M. Alvarez, Chief Financial Officer
75 Valencia Avenue, Suite 1050
Coral Gables, FL 33134
Phone: (305) 445-1341
Fax: (305) 446-8447
75 Valencia Avenue, Suite 1050
Coral Gables, FL 33134
Phone: (305) 445-1341
Fax: (305) 446-8447