ACCION Investments in Microfinance Supports Launch of Bancovelo, Honduras’s Leading Commercial Microfinance Bank

Boston, Mass., March 3, 2008— ACCION® International, a pioneer and leader in global microfinance, today saluted the successful launch of Banco Popular Covelo (Bancovelo), a newly transformed commercial microfinance institution in Honduras, which opened its doors on February 1, 2008.

Created by a merger of Popular, a microfinance savings & loan company sponsored by Grupo Financiero Covelo, with two sister entities, Bancovelo is the leading regulated microfinance organization in Honduras, with a loan portfolio of approximately $50 million and a network of 23 agencies and seven offices spread across rural and urban Honduras, with four additional agencies planned.  In making the transition from S&L to commercial bank, Bancovelo will meet increased capital requirements and will be empowered to make commercial loans.

To capitalize the new entity, ACCION Investments in Microfinance, SPC, a portfolio company sponsored by ACCION International to provide financing to microfinance institutions worldwide, assembled a consortium of five international shareholders, each of whom invested $2 million to take equal 11.76 percent stakes in the new bank. Along with ACCION Investments, these shareholders include IFC, a member of the World Bank Group; the Belgian development entity BIO; the Netherlands development institution FMO; and Banco Centroamericano de Integración Económica (BCIE – CABEI).  An additional $7 million in financing was provided by Fundacion para la Promocion de la Pequena y Microempresa ‘Jose Marie Covelo.’

In addition to its equity stake, ACCION will provide technical assistance through three resident advisors: Manuel Torres, who will act as Bancovelo’s general manager; Fernando Cantor, commercial manager; and Luis Albinez, training and capacity-building manager. ACCION has been providing technical assistance, including the transfer of credit methodology and microfinance industry best-practices, to Popular since mid-2006.  The creation of Bancovelo exemplifies ACCION’s new business model—combining equity investment with technical assistance for MFIs.

Bancovelo’s mission is to be an efficient, profitable and professional bank that offers high quality financial products and services to urban and rural markets, operating with a strong sense of social responsibility and a firm commitment to improving clients’ quality of life. Eighty-five percent of Bancovelo’s clients live in cities; 71 percent of those are women working in retail and industry sectors; and 48 percent are classified as ‘poor,’ with an average loan size of $550.  At the end of 2007, Bancovelo had approximately 24,000 clients, an amount the bank expects to triple within five years. At present, only 1 percent of loans to micro, small and medium enterprises in Honduras are financed by commercial banks, although such enterprises account for about 25 percent of GDP.

María Otero, president and CEO of ACCION International, said, “We are delighted to be part of Bancovelo’s coming of age as a commercial bank.  In our partnership over the past year and a half we’ve seen Bancovelo develop state-of-the-art credit methodology, information management and institutional capacity.  We have every confidence that the bank will continue to grow rapidly in a sustainable way — and so fulfill its mission to create opportunities for Honduras’s microentrepreneurs.”

Victor Rheinboldt, president of the board of directors of Bancovelo, said, “The launch of Bancovelo is a significant step towards expanding access to finance to small and micro enterprises in Honduras, which have been underserved until now.  We are very pleased with the financial and operational support that ACCION has provided to help Bancovelo reach this milestone, and we look forward to ACCION’s continued support.”

ACCION International is a private, nonprofit organization with the mission of giving people the financial tools they need – microenterprise loans, business training and other financial services – to work their way out of poverty.  A world pioneer in microfinance, ACCION was founded in 1961 and issued its first microloan in 1973 in Brazil.  ACCION International’s partner microfinance institutions today are providing loans as low as $100 to poor men and women entrepreneurs in 25 countries in Latin America, Asia, Africa and the United States.  In the last decade alone, ACCION partners have disbursed more than 17.9 million loans totaling more than $12.3 billion; 97 percent of the loans have been repaid.  Selected for the fifth consecutive year for its pioneering approaches to poverty alleviation, ACCION was among 45 organizations awarded the 2008 Social Capitalist Award byFast CompanyMagazine/Monitor Group. ACCION has also been awarded Charity Navigator’s highest rating – four stars – for efficiency and sound fiscal management.  For more information,

ACCION® is a registered trademark of ACCION International.

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Media contact:
Bruce MacDonald
VP, Communications
ACCION International
Tel: +1-617-625-7080, x1245

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