COFIDE: Peru's Development Bank for Growth and Sustainability

COFIDE is Peru's development bank, established in 1971 to promote economic growth and social development in the country. Its main goal is to finance projects that contribute to the country's sustainable development.

COFIDE's strategy focuses on supporting small and medium-sized enterprises, as well as microfinance institutions, to promote entrepreneurship and job creation. This approach aims to reduce poverty and inequality in Peru.

The bank's operations are guided by a strong commitment to social responsibility and environmental sustainability. COFIDE's financing priorities include projects that promote renewable energy, sustainable agriculture, and eco-tourism.

COFIDE was created to replace the Fondo de Financiamiento de Elaboración de Proyectos de Inversión (FINEPI) in 1971.

The main goal of COFIDE was to promote business activity by capturing savings and investing in strategic areas.

COFIDE was established as a public corporation to take over the functions of FINEPI and FIP, with an initial capital of 15 million soles oro.

This capital was divided into three types of shares: A, B, and C, with the first two represented by the public treasury and state bank, respectively.

COFIDE was also given the capital assigned to FINEPI and FIP, as it would replace them in their functions.

The direction of COFIDE was composed of a directorate, a general management, and a consultative committee representing relevant economic sectors.

However, the directorate and general management could not be composed of people with a shareholding interest in COFIDE, nor those previously involved in companies managed by the corporation.

COFIDE was exempt from all taxes for the first 15 years after its creation.

In 1996, the CONADE was absorbed by the Ministry of Economy and Finances, and in 1998, COFIDE was liquidated as part of the process of promoting private investment led by the Peruvian State.

COFIDE, the Central Reserve Bank of Peru, was founded in 1922. It's been around for nearly a century, providing stability to Peru's economy.

COFIDE was created to promote economic development and social welfare in Peru. Its main goal is to support the country's growth and reduce poverty.

In 2002, COFIDE was restructured to increase its effectiveness in achieving its objectives. This restructuring helped the bank to better serve the Peruvian people.

COFIDE has a long history of providing financing to small and medium-sized enterprises in Peru. This has helped to stimulate economic growth and job creation in the country.

The bank's headquarters is located in Lima, Peru, and it has a wide reach across the country.

See what others are reading: Myanma Economic Bank

COFIDE is actively working to boost the country's financial markets by investing in sustainable projects.

In 2024, COFIDE invested S/33.75 million in a local social bond issuance, which is a significant step towards achieving this goal.

This investment aims to finance projects that have a positive impact on the environment and society, contributing to Peru's economic growth and development.

By supporting sustainable projects, COFIDE is helping to strengthen the country's capital markets and create new opportunities for businesses and communities.

The Alliance with CAF is a significant step towards Peru's sustainable development. The Board of Directors of CAF has approved a new cooperation agreement for an equity investment of up to 10 million U.S. dollars to benefit COFIDE.

This financing will enable COFIDE to improve its governance and management, as well as to replicate international development banking practices. The capital received will also allow COFIDE to become a promotional institution for the development of Peru's markets and ecosystems.

The Chairman of COFIDE's Board of Directors, Jorge Velarde, expects COFIDE to become an example of sustainability for emulation in the country, delivering an added value and evaluating the impact of each operation.

On a similar theme: Banks Board Bureau

In 1992, COFIDE was converted into a second-tier bank through the Decreto Ley N.º 25694, which added its social object to favor small entrepreneurs and farmers.

This change allowed COFIDE to focus on providing financial support to small businesses and agricultural projects, rather than competing with traditional banks.

COFIDE's resources were transferred to 66 financial institutions nationwide, including 24 banks, 4 financial institutions, 5 leasing companies, 15 rural banks, 13 municipal banks, 4 cooperatives, and one Edpyme, totaling 1,040 service points.

By 1997, COFIDE's network had expanded significantly, with 66 institutions serving as its representatives across the country.

The Microglobal program, launched by COFIDE, provided loans to over 20,000 entrepreneurs in Lima and the provinces, totaling over $37 million.

COFIDE's Centros COFIDE were established to promote the creation and growth of small and micro businesses, contributing to the development of the local economy.

Check this out: The Big 4 Banks

In 2010, COFIDE became the first state organization to receive the International Investment Grade from Standard & Poor's Financial Services LLC. This achievement marked a significant milestone in COFIDE's growth and development.

COFIDE's commitment to infrastructure development was evident in 2010, as it financed several key projects, including the Buenos Aires - Canchaque highway.

The Línea 2 del metro de Lima was also a notable project that received funding from COFIDE in 2010. This project aimed to improve public transportation in Lima.

Additionally, COFIDE financed the Carretera Longitudinal de la Sierra Tramo 2, a vital infrastructure project that contributed to the country's growth and development.

During the COVID-19 pandemic, COFIDE played a crucial role in supporting Peruvian businesses.

COFIDE participated in the Reactiva Perú and FAE-Mype projects, helping approximately 900,000 businesses, making them an important partner for the State in restructuring Peruvian companies, with a focus on micro and small businesses.

These financial supports were vital compared to traditional banking, as COFIDE's resources offered flexibility, long payment periods, and adaptability to their clients' possibilities.

In 2021, COFIDE presented the Bono COVID, which strengthened the Peruvian capital market.

The key to growth and development lies in understanding the operational functions that drive it. Financiamiento is one such function, providing funding to individuals and businesses involved in productive activities and services.

This financial support enables them to invest in their ventures, creating a ripple effect that can lead to economic growth. By providing access to capital, these individuals and businesses can expand their operations, hire more staff, and increase their productivity.

One way to achieve this is through Operaciones de Crédito, which involves granting loans, advances, and discounts on documents that confirm debts owed to productive companies. This helps to stimulate economic activity and create new opportunities.

Promoción de Inversiones is another critical function, aimed at promoting and financing studies on pre-investment and investment projects in productive sectors and infrastructure. This focus on infrastructure development can have a significant impact on economic growth, especially in areas with limited resources.

To achieve this, the organization can partner with external entities to access resources, rather than relying on its own debt. This approach allows for the mobilization of funds from various sources, including government and private entities.

The organization can also Captación de Recursos, which involves collecting capital in local and foreign currencies through various funds, both public and private. This allows for the pooling of resources to achieve specific goals.

By leveraging these operational functions, organizations can create an environment conducive to growth and development.

Expand your knowledge: Arab Bank for Economic Development in Africa

At COFIDE, they offer a range of products to support growth and development in various areas.

Their support for micro and small enterprises (MIPYME) involves investing in programs that promote technological innovation and productivity improvement through the MIPYME Emprendedor Fund.

One of the key programs is PRIDER, which focuses on improving the economic well-being of rural communities through entrepreneurship.

PRIDER has two main axes: financial literacy and capacity development to participate in the market.

This is achieved through the formation of family groups in UNICAS, allowing them to understand how to manage capital and its value over time.

Since 2006, PRIDER has benefited over 18,600 families across 9 regions in the country.

COFIDE also provides support for investment in infrastructure and production, offering basic infrastructure to encourage national connectivity and promoting the construction of roads, airports, power plants, and water supply plants.

Additionally, they finance productive projects that generate employment, social inclusion, and decentralized development.

Fideicomisos are also offered, which is a legal act where the fideicomitente transfers movable or immovable assets to the fiduciario to manage according to a specified purpose for the benefit of the fideicomitente or a third party.

The financial and social structure of COFIDE is quite interesting. The total capital social is a staggering S/. 1,982'887,162.00, which is represented by the same number of actions, updated to 2023.

COFIDE's capital is divided into three classes of actions. The breakdown is as follows:

COFIDE's actions are held by the Estado Peruano, entidades y empresas distintas del Estado, and Estado Peruano, with specific numbers allocated to each class.

COFIDE, a community bank, operated in Ngozi Province, Kayanza Province, and Kirundo Province in Burundi.

Its shareholding structure was unique, with churches and non-profit associations participating in the share capital. The initial share capital was 600 million BIF, subscribed by 1,200 shareholders.

The rural population was actively involved, subscribing small amounts of the share capital and organizing into associations to mobilize savings and facilitate access to credit.

Small shareholders held more than half of the capital, distinguishing COFIDE's approach to community banking.

A fresh viewpoint: Esaf Small Finance Bank Share Price

COFIDE offered two types of microcredit: collective and individual. Collective microcredit was granted to groups with a bankable project, a well-defined administrative or legal status, and demonstrated capability.

Individual microcredit recipients had to have a bankable project, real securities, or a solid guarantee, and commit to repaying through a credit agreement.

The Fundación was a crucial part of the restructuring of COFIDE during Fernando Belaúnde Terry's mandate. This change aimed to grant COFIDE greater autonomy, which was achieved through a division of the corporation.

The capital accumulated by COFIDE was destined to be transferred to CONADE, a corporation of public ownership. This transfer was worth 300 million soles oro.

CONADE's primary goal was to be the driving force behind the country's economic development. It served as a guarantee for the companies in which it had a stake, transforming debts into public debt in case of default.

COFIDE was transformed into a state-owned private entity in the form of a joint-stock company. Its role was to attract savings and find financial intermediaries to promote projects and fund new businesses.

Inversiones COFIDE S.A. was established to manage and administer the corporation's existing investments, increasing the capital in the Peruvian market through the use of its own resources or by attracting savings.

For your interest: Association of German Public Banks

The capital social, or total amount of financial resources deposited by shareholders, is a significant aspect of a company's financial structure. The total capital is S/. 1,982'887,162.00, which is represented by the same number of shares, updated to 2023.

The company's shares are divided into three classes. The number of shares in each class is substantial.

Here's a breakdown of the number of shares in each class:

COFIDE has made significant strides in its institutional development since 2013, earning various certifications that reflect its commitment to good governance and social responsibility.

One notable achievement is the recognition of its good corporate governance practices by BVL/IBGC from 2013 to 2016.

COFIDE also received certification for its Administration of Fideicomisos, Cobranza de Colocaciones, and Programa de Capacitación Empresarial in 2015.

The institution was awarded Banco del año (ALIDE) in 2016, a testament to its strong financial performance.

In 2019, COFIDE was recognized for its commitment to sustainability with the Modelo ECOIP (MINAM) certification.

Additionally, COFIDE was designated as Empresa Pública Socialmente Responsable (FONAFE) in 2019, acknowledging its social responsibility and commitment to the community.

Here are some of the key certifications COFIDE has obtained:

COFIDE is taking significant steps towards sustainability and climate action. They're doing this through an intermediated framework loan that partly finances climate action investment projects, mainly in the sustainable energy sector, across the country.

This loan is a crucial part of their efforts to promote climate action in Peru. By investing in sustainable energy projects, COFIDE is helping to reduce the country's reliance on fossil fuels and mitigate the effects of climate change.

In 2024, COFIDE invested S/33.75 million in the local emission of a social bond. This investment aims to boost the development of financial markets by funding sustainable projects in the country and strengthening the dynamism of the Peruvian capital market.

By supporting sustainable projects, COFIDE is contributing to a more environmentally friendly and socially responsible economy. Their commitment to sustainability is a positive step towards a better future for Peru.

Check this out: African Investment Bank