IFC, a member of the World Bank Group, is providing a USD50 million loan to Caja de Compensación de Asignación Familiar Los Héroes, one of the largest cajas de compensación in Chile to help improve financial inclusion in the country. This is the first international funding to a caja de compensación in Chile. IFC’s five-year facility to Los Héroes will support the expansion of its social credit lending program to low-income workers and retirees.
Cajas de compensación, non-profit financial institutions focused on providing social security services, play a critical role in helping to reduce the access to credit gap in Chile. The Cajas system provides services to 7 million members including 5.6 million workers (nearly 63% of Chile’s economically active population) and 1.4 million retirees, and are the only institutions allowed to offer payroll loans in Chile. While the World Bank’s 2014 Global Findex Database indicates that 63% of the Chilean adult population hold an account with a financial institution, only 56% of the poorest 40% of Chile’s population have a bank account.