Factorline EQ

completed

_x000C_The proposed project consists of an equity investment of up to $15 million in Factorline S.A. (Factorline or the company). This project is aimed at both supporting the promotion of MSME lending in Chile with a particular focus on factoring and other financial products targeted at small and micro enterprises; as well as enhancing the liquidity and the scope of the private equity market in the country.Factorline stands as the largest independent factoring company in Chile with a total portfolio of $183 million equivalent and about 2,500 clients as of December 31, 2006. The company is distinguished for targeting primarily small businesses that are currently underserved by the traditional banking sector, fostering the growth of domestic and international trade undertaken by MSMEs in the country.Factoring plays a significant role in supporting the growth of MSMEs in Chile, providing an alternative to traditional bank financing and thus enabling MSMEs to finance their working capital, increase sales and expand their operations. Although the company’s growth in the last years has been solid with a portfolio increase as of year-end 2006 of nearly 60% versus 2004, a larger equity base would enable the company to further develop and expand its operations. Through this investment, IFC could play a significant role by supporting the growth of a financial intermediary serving niche MSME segments.