To boost access to financing for Ecuador’s MSMEs in the post-COVID environment, MicroVest announced an investment in Banco Solidario, one of the leading microfinance institutions in the country. MicroVest’s $5 million investment aims to support the expansion of the company’s MSME portfolio to revive the liquidity needs of small businesses seeking working capital in the post-pandemic environment. The investment also aims to support Solidario’s broader plan to develop more financial education programs for women entrepreneurs.
MSMEs account for more than 90% of companies and jobs in Ecuador, yet receive limited access to credit and financial services (IADB). COVID-19 triggered a severe recession in the country that led to an increase in poverty. MicroVest’s investment seeks to catalyze the flow of capital to promote liquidity and productivity among MSMEs, which has a direct impact on local job creation and economic growth.
Founded in 1996, Banco Solidario was one of the first banks in Latin America to specialize in microfinance. The institution offers productive financing, consumer loans, and savings products for lower-income, underserved segments of the Ecuadorian population and currently reaches more than 255k active borrowers, more than half of whom are women (55%).
Banco Solidario is one of MicroVest’s longest standing portfolio companies. MicroVest made its first loan to the company in 2004.