The FINANCIAL — The International Finance Corporation (IFC), member of the World Bank Group, announced an initial investment of $300 million pesos (approximately US$15 million equivalent) in ABL Trust Mexico, a trust conformed by MAS Leasing and Jolly Haul, two Mexican leasing companies, with the objective of providing Small and Medium Enterprises (SMEs) with financing for investing in logistics and equipment in the context of the crisis caused by COVID-19.
This investment is the first of five proposed commitments to ABL Trust Mexico that could reach a total of $2 billion pesos (approximately US$100 million equivalent) in the next three to five years. This initiative introduces a replicable, innovative funding instrument in the Mexican capital markets, which will channel capital to SMEs through asset-based lending, while tapping into stable sources of funding from domestic institutional investors.
“IFC is proud of being part of this innovative, cost-effective approach to finance the growth of SMEs through leasing. This structure becomes extremely relevant in the context of COVID-19, as SMEs are the main drivers of inclusive economic development in México. IFC considers this innovative effort with MAS Leasing and Jolly Haul as highly susceptible to be replicated internationally and in other subsectors,” said Stephanie Rubach, Senior Investment Officer of IFC.
“We are delighted to participate in this first “multi-leasing” structure with IFC. The applied criteria allow us to evolve as an organization towards better practices. Undoubtedly this process gives us a solid support that makes us project a remarkable growth with high chances of success,” said Manuel Fernández, CEO of Jolly Haul Leasing.
“MAS Leasing is pleased to participate with IFC in this innovative structure, established for the first time in Mexico. We are convinced that it will improve our services and help us achieve our objectives, now with a sustainable approach and aiming at a positive social and environmental impact in our community,” underlined Juan Pablo Rivas, CEO of MAS Leasing.
“Atmósfera is happy to have structured the joint financing for these leasing companies within the same vehicle. It is an honor to be able to support companies such as MAS Leasing and JH Leasing. This financing will help them grow and allow them to continue to positively impact development, income generation and job creation in different Mexican companies”, said Georgina Boysselle Forasté, CEO of Atmósfera, the financing strategy firm that contributed to the integration of the trust.
Leasing is particularly effective in emerging economies where there are opportunities for SMEs to drive economic and job growth, but they lack access to long-term financing necessary to take advantage of these opportunities due to underdeveloped capital markets and a risk aversion of banks. A dynamic leasing sector can greatly benefit a country’s economy by creating access to financing that, in turn, can create domestic investment and employment opportunities.