IFC and Banco Pichincha Support Sustainable Development in Ecuador

Quito, Ecuador, January 20, 2025. The International Finance Corporation (IFC), a member of the World Bank Group, announced a US$100 million financing package for Banco Pichincha C.A., aimed at promoting sustainable development in Ecuador through loans for women-led microenterprises and sustainable agriculture projects.

The US$100 million subordinated loan will consist of $55 million from IFC's own account and US$45 million mobilized from participants under IFC's syndications program. The investment will significantly improve access to financing for women-owned microenterprises and support climate resilience initiatives in critical sectors such as agriculture and fishing.

"For years, we have relied on the trust of multilateral organizations that share our vision of generating a positive impact on Ecuadorian society and promoting more sustainable practices among our clients. This process will allow us to boost the growth of women entrepreneurs and strengthen agricultural practices in the country," commented Santiago Bayas, General Manager of Banco Pichincha.

Matilde Bordón, IFC Country Manager for Ecuador and Peru, stated: "By supporting women-owned microenterprises and promoting sustainable agriculture, this financing for Banco Pichincha allows us to consolidate IFC's strategy for Ecuador and the region, which is based on three fundamental pillars: inclusion, sustainability, and productivity. The investment also aligns with the World Bank Group's Green, Resilient, and Inclusive Development (GRID) framework, which emphasizes building resilience and inclusion in all aspects of the economy and society."

The Ecuadorian economy, which showed a strong post-pandemic recovery with growth rates of 9.8% and 6.1% in 2021 and 2022, faced new challenges in 2023 and 2024 due to increased insecurity, falling oil prices, fiscal consolidation, and adverse climatic events such as a severe drought that caused an electricity crisis. These factors deteriorated the quality of employment, reducing the adequate employment rate from 35.8% in November 2023 to 33.7% in November 2024, while underemployment and other forms of inadequate employment rose from 60.6% to 62.5%. As of November 2024, the unemployment rate reached 3.7%, affecting women (4.8%) more than men (3.0%).

Given these challenges, expanding access to financing for microenterprises and small and medium-sized enterprises (SMEs) is crucial to stimulate economic growth and create jobs. The financing gap for SMEs in Ecuador is estimated at $17.9 billion, with a significant portion affecting women-owned businesses. Improving access to financing for climate resilience initiatives is also essential, especially in vulnerable sectors such as agriculture and fishing, which are vital for the livelihoods of many Ecuadorians.

Banco Pichincha, the largest bank in Ecuador with 118 years of institutional history, has taken a leading role in promoting initiatives that have a social impact and sustainable development within the country. Additionally, it has a strong commitment to sustainability and the microfinance sector, where it has more than 700,000 clients nationwide.

About Banco Pichincha

Banco Pichincha is the largest bank in Ecuador, with over 118 years of driving progress for individuals, businesses, and communities. It has more than 5 million customers in Ecuador and has been ranked among the Top 100 global companies with the highest sustainable growth by TIME magazine, being the only Ecuadorian company to achieve this ranking. Committed to innovation and sustainability, it offers financial solutions that inspire trust and generate a positive impact on society.