Cuatrecasas advises COFIDE on program to support microfinance institutions

Cuatrecasas has advised Corporación Financiera de Desarrollo (COFIDE) on structuring and implementing its Capital Strengthening Program for Microfinance Institutions, which can be requested by entities such as municipal savings and loans associations, municipal popular credit banks, and rural savings and loan institutions.

The program has three subprograms: (i) Subprogram 1 consists of facilitating the capital strengthening of municipal savings banks through temporary participations by the State in their share capital with preferred shares; (ii) Subprogram 2 consists of facilitating the capital strengthening of microfinance institutions through the State’s temporary purchase of subordinated debt instruments; and (iii) Subprogram 3 consists of facilitating the corporate restructuring of companies that have joined one of the previous subprograms.

The purpose of this program, implemented by the Peruvian Government through COFIDE, is for the national government to finance temporary capitalization and the purchase of subordinated debt in microfinance institutions, and to enable the Deposit Guarantee Fund to facilitate the corporate restructuring of those companies that require it; all of which is aimed at protecting public savings, and maintaining macroeconomic stability and continuity in the payment chain.

The team from the Cuatrecasas Lima office advising COFIDE was made up of lawyers Aldo Reggiardo, Oscar Trelles, Kiomi Osorio and Alejandro Zorrila.