Proparco partners with Capital Bank to support women entrepreneurship in Panama

10_2019_signature Capital bank RomainDeOliveira.jpg

Women in Latin America and the Caribbean have larger limitations when trying to access and control productive assets. Proparco’s investment in Capital Bank will help bridge this gap.

Proparco has recently announced a loan of USD 20M to Capital Bank which will support the development of SME lending in Panama (70% of the credit line), as well as financial inclusion for women who manage or own SMEs (30% of the credit line).

This financing is part of the 2X Challenge initiative. These two uses of funds are fully in line with the strategy of Capital Bank, which has strengthened its expertise in serving SMEs over its 11 years in operation and is now demonstrating its commitment to contribute to the inclusion of women entrepreneurs

In addition, Proparco will provide Technical Assistance in order to support Capital Bank’s willingness to serve women in an organized manner. To achieve these objects, the technical assistance will perform a market study focused on women entrepreneurs needs, support the design of a dedicated and robust financing strategy for Capital Bank, and implement tailored financial and non-financial services dedicated to women owned or managed SMEs.

At Proparco, we strongly believe, much like other DFIs, that gender equality is both a condition and a lever for development in which the private sector has a crucial role to play. Proparco is very proud of its project with Capital Bank, which dedicates 30% of its line to financing SMEs managed or owned by women.

Djalal Khimdjee, Deputy Chief Executive Officer at Proparco

This transaction qualifies under the 2X Challenge Criteria with women representing 33,7% of top management positions and 60% of employees. at Capital Bank. The Bank also provides a nursing room dedicated to the care of infants (up to 6 months) and facilitating nursing practices for new mothers. The time spent utilizing these services is considered to be paid work hours.

Some other gender sensitive measures taken by Capital Bank include a Flextime policy and the possibility for working parents to take paid time off to attend appointments that concern children under 2 years old (e.g. pediatrician).

Additionally, 30% of Capital Bank’s credit line is dedicated to supporting 2X Challenge eligible businesses and all SMEs financed will need to meet at least one of the 2X Challenge criteria. Capital Bank will report annually on their use of this loan and their investees’ compliance with the 2X Challenge criteria.

Level of Environmental & Social (E&S) Maturity:

  • Fully operational Environmental Social Management System (ESMS) aligned with IFC performance standards (dedicated procedures and tools) ;

  • Training for staff and clients though its subsidiary Capital Emprendedor fully dedicated to non-financial services. The latter is key in its SME strategy because it enables Capital Bank to differentiate itself in the Panamanian market;

  • Decent working conditions guaranteed for its employees and for suppliers’ employees (a clause is inserted in supplier contracts).

Corporate Social Responsibility (CSR) Measures:

  • Robust and organized CSR policy (since 2015);

  • Partnerships on the environmental and social issues (member of the United Nations Global Compact,  Financial Education Programme of the Panamanian Banking Association, etc.);

  • Capital Bank’s building has “Gold” LEED certification (Leadership in energy and environmental design).

Angela Rodriguez