Banco Continental S.A.E.C.A.

Among the four top tier banks in the country, Banco Continental is one of the two locally owned banks. The Paraguayan financial sector has had a remarkable evolution in terms of size and quality. However, one of the remaining constraints is the lack of long-term resources due to an underdeveloped capital market which constrains the capacity of banks in providing long-term funding to their clients. By supporting a leading and locally owned bank which holds a significant stake of the national banking system, BIO will support the financial inclusion of Paraguayan MSMEs, thus contributing to their development, productivity and competitiveness. Additionally, the project will strongly support the agriculture and cattle sector as this is the main focus of the Bank’s portfolio. Based on the average loan size and tenor offered to MSMEs by Banco Continental, we may assume that BIO’s investment of up to USD 15 million will support up to 2,410 MSMEs across the country. This transaction will also have an indirect impact on jobs creation and fiscal revenue generation as MSMEs are a key lever in the Paraguayan economy. Only 27% of the Paraguayan MSMEs have credit (45% for medium-sized), falling to only 16% in the agriculture sector. There is room for improvement and as the Bank has a significant market share in the MSME segment, it is an excellent entry point to provide indirect funding to the Paraguayan MSMEs. The loan agreement will comprise a Governance Action Plan to improve governance practices at the board level.