There are many barriers faced by the financial institutions to lend credit to small and medium-sized enterprises (SMEs) projects in Guatemala. Some of the barriers include a lack of visibility on the business opportunity. Financial institutions are not used to mobilise demand (convince clients to invest in specific solutions); they are used to finance clients that approach them. Another barrier is the fact that financial institutions evaluate the company (the borrower) that is requesting the funding and not the project.
Inter-American Development Bank (IDB) Invest granted financing directed towards Banco Industrial de Guatemala to support their portfolio growth of credit for Small and Medium-sized Enterprises (SMEs). During the structuring process, Banco Industrial has expressed its interest in creating its corporate policy and sustainability strategy, as well as simplifying its SME credit analysis and approval processes, thereby supporting the credit growth strategy towards the SME segment. They also aim to specialise its offer of financial products and services to its various clients, identifying green financing opportunities, as well as strengthening the analysis of social, climatic and environmental risk in segments where it is critical to mitigating risks. And finally, they are also seeking to enhance the capacities of the bank’s officials on the aforementioned issues.
The overall objective of the project is to support a commercial bank based in Guatemala, Banco Industrial, with strengthening their sustainability policy, enhancing their environmental and social risk management system, proposing credit strategy for Small and Medium-sized Enterprises (SME), as well as helping with the identification and management of green investments in that segment.
BASE has been working with the bank in the following:
