Banco Itaú Paraguay is owned by Itaú Unibanco S.A., which currently holds 99.99% of the total capital of the Bank, while the balance is owned by two minority shareholders, Estrel - Estudos Representacões e Administracão Ltda and Mario Miranda Ribeiro. Itaú Unibanco, one of the largest conglomerates in the Southern Hemisphere, is the result of the merger between Banco Itaú and Unibanco in 2008. The holding employs more than 108 thousand people, has more than 50 million clients and 4.6 thousand branches spread throughout 1,100 municipalities and operates in 12 different countries. Itaú Unibanco is rated investment grade globally by Moody's (Baa3), Standard and Poor's (BBB-), and Fitch (BBB). As of December 2010, the holding reported assets of $455 billion, equity of $37 billion and net income of $7.6 billion.

The proposed investment consists of a $40 million facility to be on-lent to SMEs and Agricultural sector players in Paraguay.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

Itaú Paraguay is headquartered in Asuncion, Paraguay. The Bank owns 18 branches located across the Paraguayan territory (6 outside Asuncion).

- The Project will enhance access to long-term finance for farmers and SMEs, enabling Itau Paraguay's clients to undertake capital investments at longer tenors and competitive terms; - Due to the maximum average sub-loan size of up to US$1 million, the facility will be 100% used to serve SMEs; - The mobilization of resources from other DFIs into Paraguay will support and consolidate the improvement of the business climate experienced by the Country over the past few years.

It arises as a consequence of the following factors: - The Project will provide long-term financing to SMEs in terms and conditions otherwise scarce in the financial system; - The Project will permit Banco Itau Paraguay to gradually enter the SME sector, in which the Bank currently has a limited presence (mostly due to the limited availability of medium and long-term financing); - The Project will catalyze funding from other DFIs; - The Project will cement the relationship with one of IFC's strategic partners in Latin America, Itau Unibanco.

This project involves IFC support for on-lending to farmers and agribusiness SMEs and has been classified as a Category FI project. During appraisal, IFC analyzed the E&S aspects of the Bank’s portfolio and the activities proposed to be supported with IFC finance and determined the following Applicable Performance Requirements that include (i) the IFC FI Exclusion List, (ii) applicable National Social and Environmental Laws and regulations, and (iii) specific measures to manage E&S risks in the agribusiness sector.

IFC met with the Bank’s representatives from the Corporate Accounts, Risk and Agribusiness departments, and reviewed the Bank’s existing Social & Environmental Management System (SEMS), procedures and capacity. IFC and the Bank have agreed to additional measures and screening tools to be incorporated in the Bank’s existing practices, including enhancing E&S capacity and risk assessment tools prior to disbursement. The Bank will be required to submit a periodic E&S performance report to IFC as per a format to be provided by IFC.

IFC also met with the Bank’s representatives from the HR department, and reviewed the Bank’s existing HR policies, the code of Ethics and other relevant information. The Bank will be required to demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions.