IDB Invest commits additional $50m to Victory Park Capital LAC debt fund
IDB Invest has approved an additional investment of up to $50m (£39.9m) in Victory Park Capital (VPC) Investor Fund W to promote financial inclusion and innovation in Latin America and the Caribbean (LAC).
The debt fund offers customised financial solutions for fast growing technology-driven financial institutions in the region.
The fund was initially established in 2019 by IDB Invest and the International Finance Corporation with a $100m commitment.
Read more: Janus Henderson buys majority stake in Victory Park Capital
This additional $50m investment strengthens VPC’s commitment to fostering growth and innovation of the fintech ecosystem across LAC.
“We are excited to deepen our support for the fintech ecosystem in Latin America and the Caribbean,” said Diego Flaiban, division chief and managing director for the financial sector at IDB Invest. “This investment strengthens our strategic relationship with VPC and reinforces our commitment to expanding access to financing for fast-growing fintechs, especially those serving [micro, small, and medium-sized enterprises (MSMEs)], and helps accelerate the development of fintech credit as an emerging asset class in the region.”
Middle-market fintechs in the region face a significant funding gap, unlike early-stage startups or mature financial institutions. A preference for established industries, and risk-averse financial institutions have exacerbated this issue, hindering growth.
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The fund will focus on expanding access to financing for fast-growing fintechs that target the MSMEs segment and advancing fintech credit as an emerging asset class within the private credit market to strengthen and accelerate the growth of the LAC fintech ecosystem.
“VPC has been a proud partner of IDB Invest for several years and we are grateful to be continuing our work together,” said Gordon Watson, partner at VPC. “We are passionate about enabling access to financing for communities whose needs have historically been unmet, and we look forward to supporting the continued development and growth of fintechs that are bringing crucial products to MSMEs in Latin America and the Caribbean.”
IDB Invest has a portfolio of $21bn in assets under management and more than 394 clients in 25 countries.
