Banco Santander Peru

MIGA issued a guarantee for $50.9 million to Banco Santander Central Hispano of Spain to cover a shareholder loan to its subsidiary branch in Peru. The investment is intended to expand the financing capacity of the project enterprise, Banco Santander Perú, to provide both small-scale and long-term lending. The guarantee will cover the investment against the risks of transfer restriction and expropriation of funds. Zurich US provided reinsurance in support of the guarantee.

Approximately one-third of the investment will be used for mortgage financing to individuals. Another third will be used to extend medium- to long-term financing, and the rest for lease financing to corporations at competitive rates, thus enabling those companies to modernize and expand their production facilities and business lines. Overall, increased competition should lower the cost of financing, benefiting individuals and corporations by improving their capacity to acquire equipment, machinery, and homes. The project will benefit the construction sector indirectly and help meet the demand for housing in Peru.

Banco Santander Perú is expected to procure all inputs from the local market. The project will conduct training programs covering each area of the bank's operations.