- The EIB will provide BANFONDESA the equivalent of €10 million in Dominican pesos (approximately DOP 581 million) for microenterprises.
- The EIB loan aims to support women entrepreneurs and businesses employing women in particular.
The European Investment Bank (EIB) and Banco de Ahorro y Crédito FONDESA S.A (BANFONDESA) have signed a loan in Dominican pesos worth €10 million(approximately DOP 581 million) for microentrepreneurs in the Dominican Republic.
The loan will give access to finance to those usually excluded from the conventional banking sector, such as women and young entrepreneurs. It will benefit businesses across the country with fewer than ten employees, including the self-employed. Microenterprises were estimated to account for around 80% of all businesses in the Dominican Republic in 2020.
EIB Vice-President Ricardo Mourinho Felix commented: “At the European Investment Bank, we are delighted to continue backing microenterprises in the Dominican Republic, after 30 years of successful partnership with the sector in the country. With this loan we aim to support jobs and economic growth, as well as promoting the financial inclusion of women and young people. Through EIB Global, we work closely with our partners like BANFONDESA to increase the impact of our financing, addressing the challenges faced by people around the world.”
Chief Executive Officer of BANFONDESA Cristian Reyna Tejada said: “With this financing, our bank will continue to provide financial support to micro and small businesses in manufacturing, services, trade, tourism and agriculture to develop projects with social, economic and environmental impact. BANFONDESA is pursuing a digital financial inclusion strategy in the Dominican Republic and near the border with Haiti, for which it will increase credit provision for women entrepreneurs and in remote rural areas where access to banks is limited. This signature also consolidates the decades-long partnership built by the two institutions to implement projects to greatly benefit those most in need.”
Katja Afheldt, Ambassador of the European Union (EU) to the Dominican Republic, commented: “Micro, small and medium enterprises are the backbone of the economy — in the Dominican Republic as in Europe. They often are, in particular for women and young people, the only way to earn a living. This is why the project is so important.”
Boosting women entrepreneurs
Microfinance is an important tool to help low-income earners work their way out of poverty, increasing opportunities for self-employment and access to education. As a significant proportion of microborrowers are women, it can also foster women’s financial and social independence, contributing to improved gender equality.
More than 50% of the EIB loan will be dedicated to microenterprises that are led or owned by women or employ women, thus contributing to the 2X Challenge. The 2X Challenge is an initiative to mobilise investment that increases women’s participation in the economy in emerging markets, by improving women’s access to finance, leadership opportunities and quality employment.
The European Investment Bank celebrates 30 years in the Dominican Republic
The EIB has supported the microfinance sector in the Dominican Republic since its first loan in the country in 1992. On Friday 16 December 2022, the Head of the EIB’s Regional Representation in Santo Domingo, Yves Ferreira, celebrated the 30th anniversary of the signature of the Bank’s first loan, together with EU Ambassador Katja Afheldt, the ambassadors of EU Member States and many of the EIB’s partners in the finance sector in the Dominican Republic.
Since 1992, the EIB has lent €491 million to support long-term investments in the Dominican Republic.
The EIB has been active in the Dominican Republic microfinance sector since 1992 and is now recognised as a leader among all international financial institutions supporting the sector. The Bank has granted several loans to several microfinance institutions including Banco Ademi, ADOPEM, BANFONDESA, FONDESA, FUNDAPEC and FDD. The EIB has also contributed to the capital of these institutions during their transition phases from non-governmental organisation status to regulated savings and credit banks.
To date, the EIB has committed €1.8 billion to microfinance operations around the globe.
Background information
About the European Investment Bank (EIB)
EIB Global is the EIB Group's new specialised arm dedicated to increasing the impact of international partnerships and development finance. It is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices around the world.
About BANFONDESA
Banco de Ahorro y Crédito FONDESA, S.A. (BANFONDESA) is a bank regulated by the Superintendency of Banks of the Dominican Republic. Its business model is focused on microentrepreneurs, small-scale rural producers, low-income families and urban and rural labour groups. It was created by Fondo para el Desarrollo, Inc. (FONDESA) and began public operations on 1 May 2015, continuing the tradition of financial assistance to low-income segments of society as the family and microbusiness bank.
BANFONDESA operates across the Dominican Republic, providing its urban and rural customers with various microfinance and non-financial products and services via a large network of 59 branches located throughout the country.
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