The issuance of 100% gender negotiable obligations (ON) by the microcredit social enterprise ProMujer marked a milestone not only in the country but also in the region and opened the doors to new forays of this type into the capital market.
“What makes it a milestone is that it is the first 100% gender bond”the director of the National Securities Commission (CNV), Mónica Erpen, stressed to Télam.
He stressed that “the important thing is that the money from investment funds is being made to reach the territory in the form of tiny credits, to projects that could not in any way access financing in the capital market and, moreover, it is not attending to them nobody”.
In this regard, she specified that “1,700 women are going to benefit from this $200 million issue” from ProMujer, and pointed out that “there are inquiries from different Latin American countries because it became a milestone in the region.”
He also remarked that “common investment funds manage $200,000 million and have to invest in small and medium-sized companies,” for which he stressed that “there is enormous potential for them to be able to fund and lend.”
“We are working as a next step for an issue from a social enterprise like ProMujer, which is not an SME, to be considered an SME so that mutual investment funds can then participate in funding these issues”Erpen said.
He explained that “the work with ProMujer lasted more or less a year,” and specified that “because of its size, it exceeded the ratios of an SME, because it is an important microcredit entity, and it could not enter through the simplified NO window.”
“There it occurred to us to put together a special regime that came out more or less in the middle of last year, which ProMujer inaugurated. Although it is not an SME, it does come with a social impact label and with a guarantee entity that supports 100% of the issuance, it is allowed to enter the simplified SME regime. It is the guaranteed social bond regime. And the Comafi bank was very active from the beginning of all this,” remarked the director of the CNV.
For his part, the manager of Banco Comafi’s Capital Markets, Alejandro Haro, told this agency that the entity is “very involved from the beginning with this initiative that the CNV pushed hard for social organizations to have in the capital market capital an open source of financing”.
He indicated that “ProMujer came out with the exclusive and specific seal of emissions with social impact, its natural buyer was a new category of investment funds, which are ASG, environmental, social and governance.”
He affirmed that “the size of these funds is still very small, $2,000 million, compared to the SME funds, which add up to $213,000 million,” but stressed that “the CNV has been working very well simplifying processes that seem very bureaucratic but are not So”.
“One of the relevant roles of the financial system in terms of social responsibility and a fairer society is to encourage the capital market to be another financing channel not only for large companies, but also for small ones and projects with a social content,” Haro said. .
A milestone for the country
Meanwhile, María Laura Tinelli, in charge of ProMujer’s Development area, said that “the successful issuance of this first negotiable obligation marks a milestone for the country, the region and emerging markets globally.”
She explained to Télam that “it is a milestone because it enables the use of capital market instruments for non-conventional actors such as ProMujer, which provides loans to low-income women and who operate within the real economy so that they can develop and grow their business”.
“This milestone was possible thanks to the immense contribution made by the CNV team to modify and simplify regimes that until now were mainly used by much more sophisticated actors, who belong to the financial market,” Tinelli stressed.
He pointed out that “this ProMujer issuance enables the use of a new regime developed by the CNV that allows institutions that provide financial services to underserved populations in the country, to fund themselves within the capital market at better rates and in better terms than traditional options “.
We present the results of the placement of the first gender NO in Argentina, a milestone that marks progress for financial inclusion, impact investments and the sustainability of social organizations.
More info▶️ https://t.co/9ltDabKGwp https://t.co/hHVJmNhFUW pic.twitter.com/n17aHwqFRM
— Pro Mujer (@promujer) February 7, 2023
In this regard, Erpen highlighted that “the regulator tailored itself to the needs of the issuer. We seek to adapt the regime so that ProMujer can enter and do so in compliance with all the regulations that imply investor protection, with social labeling and the guarantee.” .
For her part, Haro specified that “ProMujer’s issuance was for 12 months and at a Badlar rate”, which is around 70% per year, and remarked that “the guarantee is very relevant because it transforms a high-risk investment into one that in Ultimately, it does nothing more than replicate the risk of a deposit in a bank, and allows many more actors to be encouraged to finance this type of social enterprise”.
