IFC and Banco Daycoval Partner on $460M Loan to Boost MSMEs in Brazil’s Amazon

MSMEs play a vital role in fostering economic resilience and inclusion, yet they face a $4.5 trillion credit gap globally, with $1.2 trillion of this in Latin America and the Caribbean.

The International Finance Corporation (IFC), a member of the World Bank Group, has announced a $460 million financing package in partnership with Banco Daycoval, one of Brazil’s leading mid-sized banks in the corporate credit market. The initiative aims to stimulate credit access for micro, small, and medium enterprises (MSMEs), with a specific focus on female entrepreneurship and businesses in Brazil’s Legal Amazon region.

The loan, equivalent to BRL 2.8 billion, has a term of three and a half years. IFC is contributing $150 million from its own resources, while $310 million is mobilized from 14 international financial institutions, including Bancaribe Curacao Bank, Banco Santander, BlueOrchard, and CaixaBank. This syndicated financing supports Banco Daycoval's diversification strategy, enhancing its ability to provide competitive credit solutions and build strong partnerships with global institutions.

Banco Daycoval has committed to allocate at least 25% of the total funds to women-led businesses and 10% to MSMEs in the Legal Amazon region, marking IFC’s first loan to a commercial bank in Brazil with a predefined allocation for this critical area.

Addressing Financial Gaps

MSMEs play a vital role in fostering economic resilience and inclusion, yet they face a $4.5 trillion credit gap globally, with $1.2 trillion of this in Latin America and the Caribbean. In Brazil, the financing gap represents 27.2% of GDP, constraining MSMEs’ ability to compete and expand.

The challenges are even more pronounced in the Legal Amazon region, where private institutions offer limited credit access compared to other parts of the country. This disparity exacerbates regional inequalities in employment and income. By addressing this financing shortfall, the project seeks to promote greater financial inclusion, enhance access to basic goods and services, and create employment opportunities in underdeveloped regions.

Strategic Vision for Inclusive Growth

“Our long-standing partnership with Banco Daycoval has allowed us to expand access to credit for MSMEs, which are crucial for job creation and prosperity in the country,” said Manuel Reyes-Retana, IFC's Regional Director for South America. “This new investment aligns perfectly with IFC’s strategy to foster sustainable growth in the Amazon and drive inclusive economic development throughout Brazil.”

Sustainability and Social Impact

The project also underscores a commitment to sustainable economic development. The Legal Amazon, a biodiversity hotspot and critical global climate regulator, faces environmental and social challenges. By supporting women-led businesses and MSMEs in this region, the financing package contributes to economic diversification and resilience while promoting responsible resource management.

“Banco Daycoval is proud to be a transformative agent in Brazil’s financial market. This investment reinforces our commitment to sustainable economic development and social inclusion in historically underfunded regions and sectors,” stated Paulo Saba, Investor Relations Director at Banco Daycoval.

Additional Initiatives and Future Impact

The partnership aligns with IFC’s broader strategy to promote gender equality, climate resilience, and regional economic development. Complementary programs in Brazil include capacity-building workshops for women entrepreneurs, initiatives to integrate digital banking solutions in underserved areas, and collaboration with government agencies to streamline regulatory support for MSMEs.

A Path to Prosperity

This collaboration between IFC and Banco Daycoval represents a significant step toward addressing Brazil’s regional inequalities. By empowering businesses and fostering sustainable growth, the initiative aims to create a lasting positive impact on the nation’s economy and society, particularly in the Legal Amazon and other underserved areas.