IFC, FimBank and Bicbanco launch Brasilfactors

IFC, a member of the World Bank Group, FimBank plc, the Malta-based trade finance bank, and Bicbanco have launched Brasilfactors to offer domestic and cross border factoring and complementary services to Brazilian corporates and small and medium enterprises.

The joint venture was launched with an initial equity investment of $10 million, which may increase to US$25 million in progressive future calls as the business develops. FimBank and Bicbanco have each acquired a 40 per cent stake in the new company while IFC has acquired the remaining 20 per cent.

Although the Brazilian economy is one of the fastest growing in the world, SMEs in this country generally have limited access to funding and sophisticated trade solutions. Brasilfactors aims to help fill this gap with short-term funding against receivables and management solutions, such as risk protection and collection services, for both domestic and export transactions.

The inauguration ceremony that took place in São Paulo was presided over by FimBank chairman Najeeb Al Saleh and president Margrith Lutschg Emmenegger, Bicbanco’s vice president Milto Bardini and IFC head of equity – financial markets, Latin America & Caribbean, Paulo de Bolle.

Mr Al-Saleh, said: “Small and medium enterprises are a decisive driver for the growth of the Brazilian economy and products such as factoring play a key role in supporting these companies, as we have seen in many other countries where factoring has been a great success.”

The factoring industry is considered an important financing alternative for SMEs as it provides an integral service that includes the purchase of the SME’s trade related receivables as well as trade bill collection and administration. These services allow SMEs to take advantage of strong growth opportunities and overcome capital and access to finance constraints.

Mr Bardini said: “The launch of Brasilfactors reaffirms our commitment to Brazilian entrepreneurs at all levels. We believe that SMEs stand to benefit substantially from the management solutions and services Brasilfactors will offer.

“Our support to Brasilfactors part of IFC’s strategy to help reduce income inequality by strengthening the competitiveness and access to finance for SMEs, and integrate small producers into the supply chain,” said Mr de Bolle

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilising capital in the international financial markets.

FimBank is a leading provider of trade finance and factoring solutions. Its strategy is to further strengthen its global presence, with a focus on emerging markets, and enhancing the product range on offer, namely trade finance, structured commodity finance, factoring and forfaiting.

Bicbanco is a Brasilian bank specialised in providing corporate credit to the middle market segment – companies with annual revenues between $50 million and $500 million.