Fimbank launches Brasilfactors for SME financing

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

The joint venture was launched with an initial equity investment of US$10 million (more than €7 million), which may increase to US$25 million (€18.5 million) in progressive future calls as the business develops.

FIMBank and Bicbanco each acquired a 40% stake in the new company while IFC acquired the remaining 20%.

Although the Brazilian economy is one of the fastest growing in the world, the country’s SMEs generally have limited access to funding and sophisticated trade solutions. Brasilfactors aims to help fill the 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 took place in São Paulo and was presided by FIMBank Chairman Najeeb Al Saleh and President Margrith Lutschg Emmenegger, Bicbanco Vice President Milto Bardini and IFC, Head of Equity, Financial Markets, Latin America & Caribbean, Paulo de Bolle.

"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,” FIMBank’s Chairman Najeeb Al-Saleh said.

The factoring industry is considered an important financing alternative for SMEs because 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.

“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,” Vice President of Bicbanco Milto Bardini said

“Our support to Brasilfactors is 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,”, IFC, Head of Equity, Financial Markets, Latin America & Caribbean Paulo de Bolle said.