Announcement of a One Hundred Million Dollars World Bank Loan for Small and Medium Industry in Mexico on June 26, 1980

. FOR IMMEDIATE RELEASf . World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 80/129 June 26, 1980 A $100 MILLION WORLD BANK LOAN FOR SMALL AND MEDIUM INDUSTRY IN MEXICO The World Bank has extended a $100 mill ion loan to Mexico to help finance an integrated program to assist small- and medium-scale enterprises. The project, the second of this type supported by the World Bank in Mexico, gives special emphasis to meeting the needs of enterprises located outside the main urban areas. The Second Small- and Medium-scale Industry Development Project aims at expanding the production capacity and improvirg the efficiency of small- and medium- scale industrial enterprises by means of a comprehensive program of technical god financial assistance. The project's total cost is estimated at $272.6 million. Tr.,e World Bank's first loan for a small- and m·edium-scale enterprises project in Mexicu, of $47 mill ion, was approved in April 1978. As in the first case, the • second project will support the activities of three trust funds dealing with the industrial sector and administered by Nacional Financiera . Those trust funds are: the Fund for Guarantees and Development of Medium- and Small-scale Industry (FOGAIN), the National Fund for Industrial Deveiopment (FOMIN), and the Fund for Industrial Estates and Commercial Centers (FIDEIN). Under the project, FOGAIN will provide, or guarantee, credit to finance fixed assets and associated working capital. Minority equity capital and financial assist- ance with equity features will be made directly by FOMIN. Factory buildings, common service facilities, and equipment leasing services on industrial estates will be provided through FIDEIN. Technical assistance to industrialists will be provided by N~cional Financiera and other specialized institutions. About 700 enterprises are expected to benefit through the credit component and some 90 will be assisted by FOMIN's risk capital program. FIDEIN's factory building and equipment leasing operations will benefit up to 80 enterprises. It ls expected that some 20,000 new Job opportunities will result from the investments supported through the projects, the bulk of them in small enterprises. For the FOGAIN and FIDEIN components, small enterprises are considered those with an equity capital of between $2,170 to $217,000 and medium enterprises those with an equity capital of up to $1 .7 mill ion. For FOMIN, the maximum equity capital is $6.s mill ion. The $100 mill ion World Bank loan to Nacional Financiera, S.A. has the guarantee • of the United Mexican States. It is for a term of 17 years, including 4 years of grace, with interest at 8.25 % per annum. NOTE: All money figures are expressed in U.S. dollar equivalents.