Over the course of 25 years of operations, the Inter-American Investment Corporation (IIC) has become a reliable partner and effective catalyst for fostering economic development in Latin America and the Caribbean. The IIC opens up greater access to financial resources and technical assistance for small- and medium-size enterprises to expand and improve their operations, create jobs, and promote environmental and social sustainability. That commitment has enabled it to provide support for the more than a million small- and medium-size enterprises that have to date benefited from direct and indirect IIC loans totaling more than US$3.3 billion.
The beginnings
In 1985, after years of discussions, 21 nations signed the Agreement Establishing the IIC. The IIC was born with US$200 million in initial capital and the capacity to lend one dollar for each dollar of its capital plus reserves.
Led by Gunther H. Muller, its first General Manager, the IIC proved its pioneering, innovative spirit with its first investments and loans, approved for agroexporters and for developing free zones and entrepreneurial capital investment funds. During its early years, the IIC was the first IDB Group institution to promote microfinance and the development of the tourist industry.
New business plan
By 1993, when John C. Rahming was appointed to head the IIC, it had already approved US$450 million in financing and provided support for 100 projects throughout the region. During these years it implemented a new business plan to expand operations with financial institutions and increase equity investments and advisory services, which have become even more of a focus over the past few years.
This new plan enabled the IIC to expand its lending capacity to three times its capital plus reserves and bring in nonborrowing IDB member countries as members of the IIC. This greater flexibility in order to scale up operations and increase profitability also helped diversify the IIC’s loan portfolio by adding companies that were not necessarily majority-owned by Latin American or Caribbean shareholders.
By then, the IIC also had begun to finance the first corporate social responsibility programs in the region and to advise investment funds developing infrastructure projects.
Revamping corporate culture
In 1999, with the appointment of Jacques Rogozinski, the third and current General Manager, the IIC embarked on an overhaul of its corporate culture and a renewal of its mission. With the passage of time, that organizational change yielded a more sophisticated institution that offers a wide variety of products, follows worldwide best practice standards, and has fine-tuned its loan and project analysis strategy.
Balanced portfolio growth has been achieved by a mix in which most operations are of the high payment capacity variety, along with a few, select higher risk and higher return ones. Prudence and caution in cash flow management has been critical in times of turmoil. Delegating greater powers to senior management has made for closer monitoring of projects and enabled the IIC to achieve record assets of more than US$1.4 billion.
Over the last 10 years the IIC has become a leader in clean energy finance. It is a pioneer in the support of carbon credits, and it has launched and is rapidly expanding local-currency lending. Fifteen of the 20 biggest economies in the world—including the 10 largest—are now members of the IIC.
The IIC’s mission—to maximize developmental impact by stressing innovation while also taking into account project and client sustainability—has been enhanced. Looking ahead, innovation and creativity will remain at the top of our agenda, with a focus on companies that can bring Latin America and the Caribbean squarely into the knowledge economy and propel the region higher up the value chain.
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