COFIDES to collaborate with Banco Contactar of Colombia to financially include the rural population through savings products

The agreement provides for a non-refundable contribution under the Triple Inclusive Finance (TIF) Program.

COFIDES and Banco Contactar of Colombia have signed an agreement to implement a technical assistance project aimed to promote the supply of savings to the country's rural population, as part of the Triple Inclusive Finance (TIF) program.

The TIF Program is the first blended financing or blending project led by COFIDES in Latin America in collaboration with the European Union and the Spanish Agency for International Development Cooperation (AECID), through the Fund for the Promotion of Development (FONPRODE).

The agreement with Banco Contactar contemplates a non-refundable contribution for a maximum amount of €305,250, which complements the US$15M loan previously granted to the entity by the Spanish Cooperation through FONPRODE for the productive strengthening of Colombian micro and small enterprises, especially those located in rural areas and with special attention to post-conflict zones. The European Union is also involved in this new alliance, as it is one of the partners contributing to the TIF Program through its Latin America and Caribbean Investment Facility (LACIF).

This initiative seeks to provide value offers with a sustainable approach, considering two fundamental aspects: savings with purpose and the impact measurement system. The activities considered for each of them are:

1) Saving with purpose:

• Financial education program tailored to the different target segments, with a behavioral approach and aimed at empowering the historically underserved Colombian population to make informed financial decisions.
• Elaboration of an inclusion strategy that makes it possible to reach the dispersed rural population served by Banco Contactar.
• Creation of support material for the dissemination of financial education topics and training inputs for participants.

2) Impact measurement system: Robust impact measurement system to measure and follow up on the management performed and the results generated in the target population.

ABOUT BANCO CONTACTAR

Banco Contactar was founded as an NGO in 1991 and began operating as a bank in March 2024, opening the possibility of expanding the portfolio of products and services offered to its customers. It is regulated and supervised by the Superintendencia Financiera de Colombia. The bank has 96 branches covering 18 of the country's departments. As of December 31, 2023, the portfolio amounted to USD 157.7 billion, serving approximately 142,000 clients (91% of whom are microenterprises), primarily located in rural areas (76%).

ABOUT THE EUROPEAN UNION

The European Union manages the Latin America and Caribbean Investment Facility (LACIF), a regional blending mechanism. LACIF promotes the mobilisation of funds from European and regional financial institutions, governments and the private sector to carry out sustainable development projects in Latin America and the Caribbean. LACIF's objective is to help these countries by way of the finance of projects in key sectors for the achievement of the Sustainable Development Goals, such as: renewable energy, environment, water and sanitation, urban and rural transport, and promotion of small and medium-sized enterprises.

ABOUT AECID- FONPRODE

The Spanish Agency for International Development Cooperation (AECID) is the principal management body for Spanish Cooperation. Attached to the Ministry of Foreign Affairs, European Union and Cooperation, it manages the Development Promotion Fund (FONPRODE) with the aims of eradicating poverty, reducing social inequality and inequity among people and communities, and promoting gender equality, defense of human rights and human and sustainable development of poor countries.

ABOUT COFIDES

COFIDES is a state-owned commercial company specialized in managing State funds that provides financing for private investments to achieve various public policy objectives. For over three decades, it has been managing resources aimed at supporting the internationalization of Spanish companies, and since 2021, the FONREC, a fund aimed at strengthening the solvency of Spanish companies severely affected by the COVID-19 pandemic. COFIDES has been assigned the direct management of two new financial instruments: the Co+-investment Fund (FOCO), to attract foreign investment to Spain in activities mainly linked to green and digital transitions, and the Social Impact Fund, aimed at reinforcing the national ecosystem of impact investment. Additionally, COFIDES supports the Spanish Agency for International Development Cooperation (AECID) in managing financial cooperation resources. The Spanish state owns 53% of the capital, while the remaining 47% is held by Banco Santander, Banco Bilbao Vizcaya Argentaria (BBVA), Banco Sabadell, and the Development Bank of Latin America and the Caribbean (CAF).