The FINANCIAL — International Finance Corporation (IFC), a member of the World Bank Group, granted a loan of MXN 43.8 million to FINAE, in order to accelerate its efforts to provide student loans among young people who are at “the base of the pyramid” and want to receive an undergraduate degree in Mexico.
FINAE is an entity called Sociedad Financiera de Objeto Múltiple (SOFOM, multiple purpose financial institution), created in 2006 and devoted to provide financing through loans to students attending universities. FINAE was founded by a group of Mexican entrepreneurs gathered in the Sociedad de Apoyo a la Education (SAE, Society to Support Education), to help low-income students enroll in private universities, according to IFC.
“To maintain our position as market leaders in higher education funding, we have entered into several strategic partnerships, such as the one announced today with IFC”, said Francisco Vizcaya, chairman of FINAE.
“Quality education is an investment —said Vizcaya— as it does not only increase income and quality of life of future professionals and their families, but it also fosters national development, social equity, and regional stability.”
There is a growing demand for higher education in Mexico. In a population of 11 million young people between 19 and 24 years, there are 8 million who cannot study and have reached the age to start college. While the government is making efforts to meet the demand, it is so large that it cannot be meet this demand completely. Universities are at full capacity and over 70% of the applications are rejected.
“IFC loan to FINAE will strengthen the institution and allow for the financing of 17,500 students by 2020, whom would not be able to pursue higher education otherwise. With this partnership, IFC reinforces its commitment to private education as a key factor for progress for low to middle income families in Mexico”, said Ary Naïm, IFC Country Manager for Mexico.
IFC’s strategy in Mexico focuses on supporting private sector investment to accelerate growth, improve competitiveness, foster social inclusion, and reduce poverty.