Basic Requirements

Companies
To obtain financing from the IIC, a company must be a profitable venture with growth potential requiring medium- or long-term funding to capitalize on its market potential. Companies must have capable management who share the IIC's commitment to transparency and compliance with national accounting, tax, and environmental standards and labor practices. The IIC's target market comprises companies with sales ranging from $5 million to $35 million. However, the IIC works selectively with companies having sales in excess of $35 million. Eligible companies are typically majority-owned by citizens of any of the IIC's twenty-six member countries in Latin America and the Caribbean. The IIC finances, on a limited basis, joint venture companies that are not majority-owned by citizens from the region. While profitability and long-term financial viability are a prerequisite for consideration for IIC financing, other selection criteria the IIC will consider are related to the company's impact on factors that further economic development:

• job creation;
• generation of net foreign currency income or promotion of foreign currency savings;
• transfer of resources and technology;
• improvement of domestic management skills;
• fostering of broader public participation in company ownership; and/or
• promotion of the economic integration of Latin America and the Caribbean.
  

The IIC provides funding to all types of financial institutions that serve the small and medium-size corporate market. Eligible institutions include, but are not limited to, commercial banks, leasing companies, finance companies, and specialized financial service companies.

The IIC works with financial institutions to provide smaller long-term loans to small and medium-size companies in order to expand the IIC's market penetration and geographic coverage. The IIC selects financial institutions that are leading institutions as measured by the regulatory standards in the countries where they operate. Financial institutions considered for IIC financing are typically in the top quartile of the financial system in terms of asset quality, profitability, capital adequacy, and other measures of financial soundness. The IIC also supports the development and growth of financial institutions by offering quasi-equity financing that qualifies as tier 2 capital. While the IIC does not select financial institutions based on absolute asset size, size is a consideration. In order to be considered for IIC financing, smaller institutions within a financial system must have a clear and credible business plan for competing effectively against larger institutions.

The IIC is an active investor in private equity funds. The IIC invests in sector, country, and regional equity funds. Eligible investment funds must meet the following minimum criteria:

• exclusive focus on Latin American and Caribbean companies;
• partial or exclusive focus on companies with sales of $35 million or less;
• experienced investment management team with demonstrated track records as investors and fund managers;
• well-developed investment strategy and clearly defined investment parameters;
• demonstrated ability to raise capital; and
• legal structure, investment return parameters, and expenses consistent with market practice.