MSME support through BancoEstado III

completed

The FZ promotional loan (FöK) of USD 150 million to the Banco del Estado de Chile (BancoEstado) is intended to help strengthen the financing of micro, small and medium-sized enterprises (MSMEs) in Chile through BancoEstado. BancoEstado is the only state-owned commercial bank in Chile. The bank works within the objectives set for it to promote the Chilean economy and combat regional imbalances according to strict business criteria and under full competitive conditions with private banks. The bank's main focus, however, is on the overall objective of promoting the economy as a whole and providing broad-based and nationwide financial intermediation on a sustainable basis and with a particular focus on the lower income groups (social mission). BancoEstado's social mission is particularly evident in its great commitment to expanding the range of financial services, especially for MSMEs and social housing, as well as in facilitating access to banking for the population. The bank has by far the largest branch network in the country and therefore has the most direct access to customers, especially to smaller businesses and low-income groups, even in the most remote regions of the country. MSMEs are among the most important employers in Chile. Micro-enterprises alone account for 90% of businesses in the country and absorb around 41% of the working population, including lower-income groups in particular. The GOAL of the planned FöK is to support BancoEstado in granting loans to MSMEs. Due to BancoEstado's focus on broad-based and nationwide financial intermediation on a sustainable basis and with a particular focus on the lower income groups, the planned project contributes to balanced regional development in Chile. By granting long-term loans to MSMEs, especially in disadvantaged regions, these are strengthened, which in turn helps to create or secure jobs; the project thus makes a contribution to reducing poverty (OVERALL GOAL).