Agrícola is El Salvador’s largest bank, by equity ($271 million), assets (29% market share) and deposits (29% market share), all as of December 2003. Founded in 1955 to serve SMEs in El Salvador, Agrícola has applied successfully a strategy of technological innovation and superior customer service to evolve into one of the largest banks in Central America (incl. Panama). Having pioneered retail banking in El Salvador, it now offers domestically (together with credit card subsidiary Credibac) a complete range of banking products and services. Internationally, the Agrícola group operates four branches in the USA (primarily handling remittances from the Salvadorian diaspora), a subsidiary in Panama and representative offices in Honduras and Guatemala, and also holds a controlling interest in Banco Calley Dagnall in Nicaragua. Agrícola is rated BB (Stable) by Standard & Poor’s and BB (Negative) by Fitch and has 2,800 employees. Similar to other major Salvadorian banks, Agrícola is majority-owned (89%) by a holding company - Inversiones Financieras Banco Agrícola (“IFBA”) - with the rest of the capital distributed widely among retail investors. In turn, IFBA is 95%-owned by the ultimate holding company in the Agrícola group, Banagrícola S.A. (Banagrícola) based in Panama. Banagrícola is 50%-owned by its Board (the directors – a diverse group of Salvadorian businessmen – are the same as for Agrícola), with another 6% held by employees and the rest spread among individual investors.

The total project cost is estimated at $50 million. The proposed IFC investment is an A loan of up to $50 million for IFC’s own account.

50.0 million (USD)

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

* These investment figures are indicative

Agrícola is headquartered in San Salvador, El Salvador and operates the nation’s largest distribution network (99 branches and more than 400 kiosks and ATMs).

The project is expected to have the following positive developmental impacts: Assist in promoting primary mortgage lending in Salvador by helping the bank to grow further its housing portfolio; Improve Agrícola’s asset/liability balance, given the scarcity of long-term funding; Enhance the bank’s ability to offer medium- and long-term funding to companies in key sectors, complementing the Salvadorian government’s effort to promote SMEs and export-oriented corporates in order to benefit from regional trade liberalisation. IFC’s role in this project is to: Increase the access to long-term finance by homeowners and export-oriented companies, and Strengthen financial markets through additional investment and support for a competitive financial institution with a strong domestic presence and ambitious plans for growth in Central America - by diversifying its funding sources and implementing a robust environmental management system.

This is an FI type 1 project. The bank will be required to develop an environmental management system to ensure that relevant operations (e.g. project finance, corporate lending, leasing, but not including individual mortgage lending) comply with the applicable environmental and social requirements in El Salvador.
Location of environmental documents in locally affected community