PG Impact Investments, a global impact investment firm, has made a debt investment into Ecuador’s leading inclusive finance provider, Banco Pichincha. The investment will strengthen the banks regulatory capital and enables Banco Pichincha to develop new loan products and responsibly expand access to financial services.
Ecuador’s reliance on petroleum revenues and remittances makes the economy vulnerable to external macroeconomic shocks. In recent years, falling oil prices and a serious earthquake in April 2016 led to a severe economic downturn. In a society characterized by marked income inequality, with 23.1% Ecuadorians living below the poverty line in June 2017, such economic challenges lead to acute hardship for the most vulnerable. Exclusion from traditional financial services for the majority of low-income individuals, many of whom are self-employed or micro-entrepreneurs, serves to compound their vulnerability.
Banco Pichincha works to provide financial stability for these individuals, offering a broad suite of financial products that target traditionally underserved populations. The institution not only has the largest share of the microenterprise segment in Ecuador, but also offers SME loans, housing loans, micro savings, remittances and micro insurance products and provides technical assistance and financial education to its clients. This is driven by Banco Pichincha’s deep commitment to establish and run a truly socially responsible institution. The institution’s social credentials were underscored by it becoming the first institution in Ecuador to achieve the internationally recognized SMART accreditation for customer protection in June 2017.
Banco Pichincha has established itself as a clear leader in the Ecuadorian inclusive financial services industry, with a leading position in each of its loan segments and the largest branch network in Ecuador, giving it unparalleled reach into underserved communities. The institution has a proven track record of solid performance through challenging market conditions and providing stable and attractive returns to its investors.
Urs Baumann, CEO of PG Impact Investments, stated: “We are delighted to support an organization that can deliver impact at scale in a commercially successful fashion. We believe Banco Pichincha plays a critical role in providing financial stability to the people of Ecuador.”
This investment was completed in partnership with BlueOrchard as part of PG Impact Investment and BlueOrchard’s bespoke joint-investment arrangement to enable emerging market banks and microfinance institutions to strengthen their capital structures, develop new loan products and responsibly expand access to financial services.
About PG Impact Investments
PG Impact Investments was founded in 2015 with the vision that private investment, innovation and entrepreneurial talent can provide solutions to the challenges faced by our society, as well as create sustainable growth. PG Impact Investments is a private sector, mission-driven, global investment firm specializing in investment solutions aimed at delivering financial returns as well as creating a positive social and/or environmental impact. It manages investment strategies for an international clientele of professional investors who are seeking investment solutions that offer market-rate returns, while also helping to address pressing social or environmental challenges. All profits from the business activities of PG Impact Investments are transferred to PG Impact Investments Foundation. The Foundation supports social initiatives and social businesses ventures that otherwise would not receive funding through commercial investors or investment funds. Whilst being independent from Partners Group, PG Impact Investments entities are backed by Partners Group and its employees, and benefit from the global infrastructure, investment know-how and specialist resources of this leading global private markets investment manager.
About Banco Pichincha
Founded in 1906, Banco Pichincha is the largest inclusive finance bank in Ecuador, by capitalization, number of depositors and branch network. The bank has 3.0 million customers in Ecuador, over USD 10 billion in assets and over USD 8 billion in deposits, as well as more than 200 branches in the country.
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