MIGA issues capital optimisation guarantees to Banco Santander to boost lending in Colombia and Uruguay

The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group and home to the World Bank Group Guarantee Platform, has issued guarantees to Banco Santander, S.A., enabling increased lending to create jobs and support sustainable development goals in Colombia and Uruguay.

MIGA will provide a combined $639.3 million in capital optimisation guarantees to Banco Santander. These guarantees allow the bank to optimise the capital treatment of mandatory reserve requirements held with host-country central banks, thereby freeing up capital to extend new loans to impactful projects.

Ariane Di Iorio, Director of the Financial Institutions Group at MIGA, said, “Smaller businesses in rural areas of Colombia have historically been overlooked by the financial services sector, and the country’s electric vehicle loan market, while fast-growing, is still nascent.”

“Meanwhile, Uruguay is vulnerable to climate shocks, which impact lives, livelihoods, economic growth, inflation, and the country’s current account. We’re delighted to partner with our long-standing client Santander on these latest capital optimisation guarantees, which will unlock capital to address key development challenges.”

Colombia: supporting microenterprises and decarbonisation

MIGA’s first capital optimisation guarantee in Colombia amounts to $100 million. This facility will enable Banco Santander to provide approximately $59 million in new loans targeted at microenterprises in rural areas, with a particular focus on women-owned businesses, which constitute 68% of the beneficiaries. 

Additionally, financing will be extended to support electric and hybrid vehicle purchases, accounting for 32% of the loans.

Oscar Moseley, Head of Private Credit Insurance at Banco Santander, said, “We are pleased to continue strengthening our long-standing partnership with MIGA through these capital optimisation guarantees in Colombia and Uruguay.”

“ These transactions are a strong example of how Santander can use innovative risk transfer solutions to deploy capital more efficiently, while supporting financial inclusion, climate finance, and sustainable growth across Latin America.”

Financial inclusion for smaller businesses, especially those owned by women, and decarbonization efforts remain two of Colombia’s most pressing development challenges. 

Micro, small, and medium enterprises (MSMEs) contribute around 40% of Colombia’s gross domestic product (GDP) and generate 80% of employment. However, these enterprises are often underserved by traditional lending institutions, facing an estimated financing gap equivalent to 14% of GDP. According to Colombia’s National Administrative Department of Statistics, 35.4% of the country’s microenterprises are women-owned.

Colombia has also made significant strides in accelerating transport electrification, supporting its ambition to achieve carbon neutrality by 2050. This guarantee supports these efforts by facilitating financing for electric and hybrid vehicles.

Uruguay: Renewing support for sustainability-focused lending

In Uruguay, MIGA has renewed an existing guarantee of $539.3 million. Banco Santander Uruguay has already disbursed capital freed up under this guarantee to a broad range of sustainability-focused projects, including green transportation, clean energy, climate-smart agriculture, and sustainable construction.

The renewal is expected to generate $163.6 million for new lending, helping Banco Santander Uruguay reach its goal of $300 million in climate finance by December 2028 and reinforcing its commitment to sustainable growth.

MIGA’s capital optimisation guarantees to Banco Santander aim to improve financial inclusion and support sustainable development and climate finance in Colombia and Uruguay.