WWB Calí: Banco de Bogotá Loan Guarantee

This case study explores the role of USAIDs loan guarantee to Womens World Banking (WWB) Cali, Columbia, in evolving WWB Calis funding base. In 2002, USAID guaranteed a USD three million loan from Banco de Bogotá to help WWB finance its portfolio growth. This was WWBs second USAID loan guarantee in two years. Prior to these guarantees, WWB Cali used long-term loans from international financial institutions and short-term loans from domestic banks to finance its operations. The study reveals that WWB Cali has further diversified its funding base by issuing bonds in the Colombian capital markets since the USAID guarantees. Findings indicate that the loan guarantees:

• Addressed WWBs capital constraints in the short term;
• Helped WWB Cali to accesses sizeable long-term, local currency loans directly from Colombian banks, without guarantee or collateral requirements;
• Enabled WWB to establish a relationship with local banks that continued after the guarantees expired;
• Improved WWBs debt repayment profile;
• Helped fuel WWBs portfolio growth, while staying true to its mission to serve the microenterprise market;
• Impacted WWBs strategic planning, prompting the management team to consider more creative sources of funding.