Founded as a small credit card operation, over the last decade GFU has invested heavily in technology, has considerably expanded its delivery network and has established regulated commercial banks in Guatemala (1990), Nicaragua (1992), Honduras (1993) and more recently in El Salvador (1994), Panama, Costa Rica and Mexico. The group has since been harnessing existing synergies in information technology, regional delivery, marketing and best practices in order to position itself for rapid growth within the region. The Group is controlled by a group of Central American shareholders led by Dr. Ernesto Fernandez Holmann. With more than 35 years of banking and credit card business experience, Mr. Fernandez is one of the top bankers in Central America. Dr. Fernandez Holmann holds a Doctorate Degree in Economics from Harvard University as well as a Bachelor’s Degree in Economics from Georgetown University. Prior experience includes President of Wells Fargo Interamerican Bank, Miami, Florida; Executive Director of Comercial Santa Carla, S.A., Panama; Executive Director & CEO of Banco de America, Managua, Nicaragua. Day to day operations are managed by a team of professional managers, most of them educated in the US.

The total project cost is estimated at $50 million.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

The project involves a major regional banking and financial group which operates across Central America, with centers in El Salvador, Guatemala, Panama, Honduras, Nicaragua and Costa Rica.

In a region where the average bank has less than $20 million in equity and makes less than $2 million in net income, the regional play deployed by groups such GFU will generate considerable economies of scale and bring affordable banking solutions to Central American clients. The development of strong regional financial groups has a strong developmental appeal in light of its positive contribution to the financial systems depth and soundness in the region, and ensuing repercussions on economic growth and poverty reduction. Also, the emergence of regional players will contribute to leverage the more advanced banking regulation in force in El Salvador and Panama, to other less developed markets such as Honduras and Nicaragua. With the proposed project, IFC would continue developing its successful strategy in Central America. The project would provide critical support to GFU’s expansion plans in the Central American region, enabling the Group to diversify funding sources, reduce liquidity risks and enhance financial management. The proposed project is expected to have the following developmental impacts: - Enable GFU to grow its business thus providing additional credit to borrowers in the Central American region; - Build-up regional banking scale. The Group will be able to build on their experience in more developed economies such as El Salvador and Panama and bring expertise and management discipline to less advanced markets such as Honduras and Nicaragua; - Support retail banking activities. Retail banking, particularly in Central America, is an underserved market. The Group’s expansion will increase the consumer’ access to loans and banking services and will provide more affordable and comprehensive banking solutions to clients through synergies generated from the integration and consolidation of Grupo Uno’s operation in the region; and - Improve the Banks’ financial fundamentals by diversifying funding sources and reducing liquidity risk. IFC Role IFC is expected to play a key role in the project. It will: - support Uno’s growth strategy in Central America by providing long-term financing that otherwise would not be available; - improve the financial fundamentals of the banks by diversifying funding sources and reducing liquidity risks; - enhance environmental management in the Group by establishing higher standards in their countries; and - demonstrate a vote of confidence in a strong and well-managed regional group and support for Central America.

This is an FI type 1 project. Grupo Uno will be required to implement an environmental management system to ensure that relevant operations comply with host country environmental and social requirements.
Location of environmental documents in locally affected community