IDB Invest Partners with Banco ABC Brasil to Finance Medium-sized Businesses in Brazil

WASHINGTON - IDB Invest has partnered with Banco ABC Brasil S.A. to provide $100 million for expanding access to finance for medium-sized enterprises.

The financing will support Banco ABC Brasil's strategic expansion in the middle market segment. By increasing the availability of long-term funding, the project is expected to improve access to credit for medium-sized businesses. This support is expected to contribute to formal employment, enhance financial health, and contribute to Brazil's sustainable development goals. At least 30% of the proceeds will be allocated to women-led enterprises.

The $100 million loan is structured as follows: IDB Invest will provide $50 million; the JICA Trust Fund Achieving Development of Latin America and the Caribbean (TADAC Fund) will contribute $25 million; and FinDev Canada will co-finance with an additional $50 million. IDB Invest provided a non-committed amount of $25 million that offers the possibility of Banco ABC Brasil carrying out a new transaction within a period of 1 year.

SMEs are responsible for 30% of Brazilian GDP, 72% of the country employment and 99% of the enterprises. Nevertheless, SMEs face greater credit constraints than larger firms. High interest rates, macroeconomic volatility, and structural challenges have constrained lending to this segment. The transaction will help address Brazil's SME finance gap, estimated at $593.8 billion, and promote economic growth.

Beyond financial support, IDB Invest will provide advisory services to Banco ABC Brasil to enhance its sustainability reporting in line with IFRS standards.

This transaction marks IDB Invest's fifth operation with Banco ABC Brasil and reinforces its commitment to promoting financial health and sustainable development in Brazil.

About IDB Invest

IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $22 billion in assets under management and more than 400 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries. Visit our website www.idbinvest.org/en.

About Banco ABC Brasil

ABC Brasil is a multi-service bank specialized in offering a diversified range of financial solutions for companies. Listed on Level 2 of Corporate Governance of the São Paulo Stock Exchange (B3), it is one of the few banks in the country supported by an international controlling shareholder while maintaining local autonomy. In 2024, the year it celebrates its 35th anniversary, the bank introduced its new market positioning, based on the attributes of solidity and client relationships. Guided by the belief that human relationships create value, it inspired the concept of ROR (Return on Relationship), a way to enhance business and brand success by addressing clients' needs and fostering long-term bonds of loyalty and trust. In addition, its client-focused approach has led ABC Brasil to expand its portfolio, which now includes insurance brokerage, energy trading, credit recovery, and investment banking.

About TADAC Fund

The JICA Trust Fund Achieving Development of Latin America and the Caribbean (TADAC) is a fund managed by the IDB Group, established in collaboration with the Japan International Cooperation Agency (JICA) to promote sustainable development in Latin America and the Caribbean. Through an initial contribution of US$1 billion, the fund seeks to catalyze private investment by co-financing strategic projects. TADAC is JICA's first fund with the IDB Group dedicated to the private sector and the largest in the region, reinforcing IDB Invest's "originate-to-share" business model.

About FinDev Canada

https://www.findevcanada.cawww.f/FinDev Canada is Canada's bilateral Development Finance Institution (DFI), supporting development through the private sector. We provide financing, investment, and blended finance solutions, as well as technical assistance and advisory, to promote sustainable and inclusive growth in emerging markets and developing economies (EMDEs), in alignment with the Sustainable Development Goals (SDGs) and Paris Agreement commitments. Find out more about FinDev Canada at www.findevcanada.ca