Areas of impact

SME Lending: SMEs have a leading role to play in promoting inclusive and sustainable economic growth and employment in Ecuador as they provide income and access to public services to high- and low-skilled people. SMEs are also key drivers for innovation. However, they have a limited access to credit. Produbanco is proactively addressing the existing credit gap for SMEs. Not only does it provide access to capital, but the Bank also dedicates a considerable amount of time and resources for training and working on capacity building with its SME clients.

Financial integration: Produbanco has received local and international awards that recognize its prestige, service quality and innovation capabilities. For instance, Ekos magazine awarded Produbanco the first place in customer service in Ecuador (2016-2017). Latin Finance magazine named Produbanco the ‘Best Bank in Ecuador’ (2017) and The Banker magazine, a publication of The Financial Times group granted Produbanco the ‘Bank of the Year’ award for the tenth time (2002, 2007, 2009-2015, 2017).

Green Lending: In August 2016, the Bank launched its Green Lines program (Lineas Verdes) that consists in a series of loans to be issued to companies with carbon neutral or energy efficiency certification. The terms of these loans for certified companies are attractive in terms of tenor and grace period. Currently, the loans issued through the Green Lines program represent 1% of the total loan portfolio of the Bank. This number, according to Produbanco, is expected to increase to 3.5% by 2022. In 2019, Produbanco started its “Cuenta Verde” program, the first Green Saving Account of the Ecuadorian banking system. This saving account raises funds for credits in Produbanco’s Green Lines program.

Carbon compensation: Produbanco works with Soluciones Ambientales Totales «SAMBITO» to measure Produbanco and its subsidiaries’ carbon footprint, reduce its impact and offset carbon emissions. Carbon compensation is achieved by supporting the conservation of 950 hectares of native forest in the Tinajillas Río Gualaceño Municipal Ecological Conservation Area.

ESG Management System: Produbanco developed its own Environmental, Social and Governance risk assessment system, SARAS, in 2016. The bank has been dedicating a whole team to ESG Management since 2017.

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Responsible Investment Initiatives: Produbanco is committed to several responsible investment initiatives. The bank has been participating in the Global Reporting Initiative (GRI) Materiality Disclosure since 2007. In 2017, it became a member of Global Compact to adhere to the Sustainable Development Goals. Furthermore, it has been using the IFC Performance Standards to assess projects since 2018.

 

Environmental and social action plan

Produbanco “Shadow SDG Indicators” and “Reach Targets” Monitoring

This transaction will contribute to the Sustainable Development Goals 7, 8, 9, and 10. 

Blue like an Orange has contractual rights to annually track the following “Shadow SDG Indicators” throughout the life of the loan in order to compare them to their baseline level:

  • Average interest rate of loans to green/non green SMEs

  • Average value of loans disbursed to green/non green SMEs

  • Percentage of NPLs to green/non green SMEs 

  • Average maturity of loans disbursed to green/non green SMEs

  • Amount of loans disbursed to green/non green SMEs  

  • Average interest rate of loans disbursed to green/non green SMEs

  • Size of green/non green SME Portfolio

  • Number of loans disbursed to green/non green SMEs

  • Number of loans to green/non green SMEs

  • Number of green/non green SME clients with loans disbursed

  • Average maturity of loans to green/non green SMEs

  • Number of new green/non green SME clients with loans disbursed

 

These “Shadow SDG indicators” were mapped to the Sustainable Development Goal Indicators 7.a.1, 8.2.1, 8.10.2, 9.3.1, 9.3.2 and 10.b.1 that were approved by the UN Statistical Commission.

Through these Shadow SDG Indicators, Blue like an Orange will also be able to track the contribution of the transaction to Blue like an Orange’s “Reach Target” corresponding to financial institutions: “Number of SMEs with access to financial services”.

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Training : IDB Invest’s monitoring includes a training program with a focus on green lines to senior management, loan officers, credit analysts, as well as E&S specialists. It will also support the adjustment of the bank’s Environmental and Social Management System (SARAS).