Getting Bank to Try Different Kind of Financing, is Exactly What These Two Did

By: Mary Hladky, Daily Business Review

 

The Dealmakers: Pedro “Tony” Alvarez and Colleen Grady
The Deal: The Alvarez Arrieta & Diaz-Silveira attorneys represented Bayport Colombia in securing a $50 million loan from the Inter-American Development Bank (IDB) to finance micro-loans that will be made to lower income government workers and pensioners in Colombia. The loan was funded on June 17.
Details: The deal marks the first time the IDB, which provides financing for development in Latin America and the Caribbean, has given a financing package to a micro-lender.

Headquartered in Bogota, Bayport Colombia is a subsidiary of Bayport Management Ltd., which also operates in seven African countries and Mexico.

The nonbank financial services company provides loans to people who have limited or no access to banking services, with the intent of enabling them to improve their lives. Loan payments are made through payroll deductions.

Bayport estimates the $50 million will allow the company to provide loans to 110,000 Colombian families, with the minimum loan amount the equivalent of $500. The loans are typically used to pay for education, home improvements, health care, and launching or expanding small businesses. According to a project description submitted by Bayport, the annual interest rate was to be 23.8 percent.
Bayport is a new client for Alvarez and Grady. The company’s financial adviser knew them from other deals they had done in the region and recommended them to Bayport.
“We think it is very exciting because everything that is about accessing banking services and financial services in Latin America is growing very fast,” Alvarez said. “The unbanked piece of that market is very large. There is huge potential there to bring these services to people all over the region. Smaller borrowers don’t have much access yet to commercial lenders.”

 

Read the full story on the Daily Business Review.