Press Releases

Signing ceremony
MSME

On March 18, the Japan International Cooperation Agency (JICA) signed a $150 million loan agreement with a Colombian bank, Banco Davivienda S.A., to fund micro, small and medium-sized enterprises (MSMEs) in Colombia through the Private Sector Investment and Finance (PSIF) window.

In Colombia, MSMEs have played a vital role in sustaining the nation’s economy and job creation, accounting for about 99% of the total number of enterprises, 28% of the nation’s gross domestic product (GDP), and 67% of employment. Colombia now faces a severe economic challenge as the unemployment rate has risen to approximately 15%, which is critically larger than the average of the total Latin and Central America region (10%). In spite of the significance of MSMEs in the country, 62% are reported to lack access to finance and this financial gap for MSMEs is estimated to be $56.2 billion. Given this situation, improving financial access for MSMEs in Colombia should be a challenge of great urgency.

Banco Davivienda S.A. has a vision of “Enriching life with integrity,” and acknowledges the significance of promoting MSMEs in Colombia economy. Setting promotion of MSMEs as one of its business strategic goals, Banco Davivienda S.A. is rapidly expanding its activities in the MSMEs sector. The bank is also introducing digital platforms to offer financial solutions to businesses throughout the nation. JICA sees the bank as an essential partner in addressing the funding gap for MSMEs.

Colombia is also prioritizing further empowerment of women. In November 2021, JICA President KITAOKA Shinichi held talks with H.E. Mrs. Marta Lucía Ramirez Blanco, the vice president and minister of foreign affairs of the Republic of Colombia, when they especially focused on economic recovery and job creation following the COVID-19 pandemic, as well as encouragement of women's empowerment. The Colombia loan was signed against this backdrop and more than 30% of JICA’s loan proceed is to be utilized for funding women-owned MSMEs through Banco Davivienda S.A. In September 2021, JICA issued a gender bond (*1) to raise funds to promote gender equality and women’s empowerment through its operation, and JICA’s commitment to Banco Davivienda S.A. on this occasion is sourced from funds raised by the gender bond.

The loan will be used in cooperation with the International Finance Corporation (IFC) in funding Banco Davivienda S.A., thus jointly contributing to the nation’s sustainable economic growth with MSMEs gaining improved access to the funds they need. This will align with SDGs (Sustainable Development Goals) 5 (gender equality), 8 (decent work and economic growth), and 9 (industry, innovation and infrastructure).

(*1) Gender bond:
Bonds issued in September 2021 to address gender issues that have been recognized for their significant importance in the wake of the COVID-19 crisis. The funds raised by gender bonds will be used for JICA projects that contribute to gender equality and women’s empowerment.