Scotiabank: “Missing middle” attracts new regional investors

Scotiabank: “Missing middle” attracts new regional investors

Middle-income families in Costa Rica are particularly underserved when it comes to mortgage financing. Public programs target low income segments, while banks focus largely on high income. SMEs face similar challenges in accessing credit.

The IDB partnered with Scotiabank in San Jose to address the “missing middle” in mortgage financing, as well as help expand lending to SMEs.  The IDB provided $40 million of its own resources and began the search for interested co-investors.

The enthusiasm from the market was impressive. Through its B loan program, the IDB mobilized an additional $57 million from commercial investors. Oversubscribed by almost two times, the B loan saw the emergence of new regional players, including Trinidad and Tobago, Chile and Panama.

Mobilization Results:

  • The $57.5 million B loan saw the emergence of new commercial players from the region
  • The B loan transaction illustrates the growing trend of strong regional banks participating in syndicated operations after the global crisis

Development Results:

  • Scotiabank will expand its mortgage financing by downscaling into the segment of middle and lower-middle income families, and further expand its commercial loan portfolio to SMEs

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