Publish Date : 13-Apr-2018
IFC, member of the World Bank Group, approved a loan for US$150 million to BBVA Colombia, a subsidiary of the BBVA Group, to strengthen the capacity of this financial institution to provide housing loans, and to directly and indirectly contribute to boost the Colombian economy and to improve the living conditions of the population in Colombia.
The loan will allow BBVA Colombia to strengthen the dynamics of growth in mortgage loans, which will play a fundamental role in boosting the development of the housing sector in Colombia and through it, that of the economy. The building sector represents about 4% of the country's GDP and has links with other sectors of the economy such as cement, iron, insurance, real estate services, among others. Likewise, housing ownership levels in Colombia are among the lowest in Latin America, and the country has an estimated housing deficit of about 3.5 million units.
Likewise, the housing sector is a fundamental part of the economic policy strategy in Colombia, and traditionally, a successful part of the growth recovery planning. In this regard, there are plans to encourage and reduce prices on the acquisition of housing loans for the middle class through subsidies to mortgage interest rates allowing access to more families.
The mortgage portfolio in Colombia is still low, and there is a long way to go on that front. This type of financing represents only 7% of the GDP, lower than that of other countries in the region.
On the other hand, the sector is a great generator of both unskilled and skilled labor. World Bank estimates show that each new built house can create five jobs in sectors such as construction, finance, manufacturing and retail.
"At BBVA Colombia we are committed to the economic and social development of Colombia, and understand the housing sector as one of the most important to promote the improvement of the living conditions of Colombians, and one of the fundamental links of the economy that contributes in an important way to the growth of other subsectors", said the Executive President of BBVA Colombia, scar Cabrera Izquierdo.
According to Cabrera Izquierdo, "Colombia still has a way to go to provide quality housing to more Colombians, and thus to contribute to improving the quality of life and reducing poverty. This is how BBVA understood it, and that is why we are decidedly supporting this sector We are always looking to finance housing projects, and to support Colombians who want to acquire a home. We are leaders in the financing of housing in the sector with a market share of 17% and a portfolio that grew 5% at the end of 2017."
This operation is part of the long-standing relationship between IFC and BBVA Group, which in the past has included debt investments and foreign trade financing facilities provided to its subsidiaries in Paraguay, Peru, Chile, Argentina, Colombia and Turkey.
A strong housing sector is critical for Colombias sustainable development and we are confident that financial institutions such as BBVA can play an important in helping drive the growth of this sector, said Georgina Baker, IFC Vice President for Latin America and the Caribbean, Europe and Central Asia. "BBVA is in an ideal partner in our efforts to increase competition and promote access to finance in Colombias banking sector," she said.
The financing also shows IFC's efforts to support Colombia's economic development having invested and mobilized nearly eight billion dollars since 1956. IFCs strategy for Colombia is now largely focused on providing support to key private sector actors who can support the development of the country's capital markets and increase access to finance for Colombian companies.
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