Peru’s COFIDE reinforces small-bank financing

Peruvian development bank Corporación Financiera de Desarrollo (COFIDE) has implemented a capital strengthening program to provide loans to small banks and financial Institutions, such as municipal and rural savings banks and loan associations.

Posted Thursday, October 14th 2021
Peru’s COFIDE reinforces small-bank financing

COFIDE is a private development bank aimed at providing financing to aid economic and social development with minimal environmental impact.

The capital strengthening program is designed to facilitate the capital strengthening of municipal savings banks through temporary state participation in their share capital under a preferred share scheme, and to offer loans to such banks through the Peruvian state’s temporary purchase of subordinated debt instruments.

The program is also aimed at facilitating the corporate restructuring of companies that had participated in COFIDE’s previous programs.

The program will allow the Peruvian government to provide temporary financing with the purchase of subordinated debt in micro-financial institutions, and enable the deposit guarantee fund to facilitate the corporate restructuring of companies that require it.

The program is aimed at protecting public savings, and maintaining macroeconomic stability and continuity in the payment chain, according to law firm Cuatrecasas, whose Lima office advised COFIDE on the structuring and implementation of the program.

Cuatrecasas’ team was led by Aldo Reggiardo, with Oscar Trelles, Kiomi Osorio and Alejandro Zorrila.