BOSTON, March 3 /PRNewswire/ -- ACCION(R) International, a pioneer andleader in global microfinance, today saluted the successful launch of BancoPopular Covelo (Bancovelo), a newly transformed commercial microfinanceinstitution in Honduras, which opened its doors on February 1, 2008. Created by a merger of Popular, a microfinance savings & loan companysponsored by Grupo Financiero Covelo, with two sister entities, Bancovelois the leading regulated microfinance organization in Honduras, with a loanportfolio of approximately $50 million and a network of 23 agencies andseven offices spread across rural and urban Honduras, with four additionalagencies planned. In making the transition from S&L to commercial bank,Bancovelo will meet increased capital requirements and will be empowered tomake commercial loans. To capitalize the new entity, ACCION Investments in Microfinance, SPC,a portfolio company sponsored by ACCION International to provide financingto microfinance institutions worldwide, assembled a consortium of fiveinternational shareholders, each of whom invested $2 million to take equal11.76 percent stakes in the new bank. Along with ACCION Investments, theseshareholders include IFC, a member of the World Bank Group; the Belgiandevelopment entity BIO; the Netherlands development institution FMO; andBanco Centroamericano de Integracion Economica (BCIE - CABEI). Anadditional $7 million in financing was provided by Fundacion para laPromocion de la Pequena y Microempresa 'Jose Marie Covelo.' In addition to its equity stake, ACCION will provide technicalassistance through three resident advisors: Manuel Torres, who will act asBancovelo's general manager; Fernando Cantor, commercial manager; and LuisAlbinez, training and capacity-building manager. ACCION has been providingtechnical assistance, including the transfer of credit methodology andmicrofinance industry best-practices, to Popular since mid-2006. Thecreation of Bancovelo exemplifies ACCION's new business model-combiningequity investment with technical assistance for MFIs. Bancovelo's mission is to be an efficient, profitable and professionalbank that offers high quality financial products and services to urban andrural markets, operating with a strong sense of social responsibility and afirm commitment to improving clients' quality of life. Eighty-five percentof Bancovelo's clients live in cities; 71 percent of those are womenworking in retail and industry sectors; and 48 percent are classified as'poor,' with an average loan size of $550. At the end of 2007, Bancovelohad approximately 24,000 clients, an amount the bank expects to triplewithin five years. At present, only 1 percent of loans to micro, small andmedium enterprises in Honduras are financed by commercial banks, althoughsuch enterprises account for about 25 percent of GDP. Maria Otero, president and CEO of ACCION International, said, "We aredelighted to be part of Bancovelo's coming of age as a commercial bank. Inour partnership over the past year and a half we've seen Bancovelo developstate-of-the-art credit methodology, information management andinstitutional capacity. We have every confidence that the bank willcontinue to grow rapidly in a sustainable way -- and so fulfill its mission to createopportunities for Honduras's microentrepreneurs." Victor Rheinboldt, president of the board of directors of Bancovelo,said, "The launch of Bancovelo is a significant step towards expandingaccess to finance to small and micro enterprises in Honduras, which havebeen underserved until now. We are very pleased with the financial andoperational support that ACCION has provided to help Bancovelo reach thismilestone, and we look forward to ACCION's continued support." About ACCION ACCION International is a private, nonprofit organization with themission of giving people the financial tools they need -- microenterpriseloans, business training and other financial services -- to work their wayout of poverty. A world pioneer in microfinance, ACCION was founded in 1961and issued its first microloan in 1973 in Brazil. ACCION International'spartner microfinance institutions today are providing loans as low as $100to poor men and women entrepreneurs in 25 countries in Latin America, Asia,Africa and the United States. In the last decade alone, ACCION partnershave disbursed more than 17.9 million loans totaling more than $12.3billion; 97 percent of the loans have been repaid. Selected for the fifthconsecutive year for its pioneering approaches to poverty alleviation,ACCION was among 45 organizations awarded the 2008 Social Capitalist Awardby Fast Company Magazine/Monitor Group. ACCION has also been awardedCharity Navigator's highest rating -- four stars -- for efficiency andsound fiscal management. For more information, visit
ACCION Investments in Microfinance Supports Launch of Bancovelo, Honduras's Leading Commercial Microfinance Bank
March 05, 2008, 10:26 p.m. EST 4 Min Read
