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User:Marilynp93/sandbox/Inter-American Investment Corporation

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Inter-American Investment Corporation The Inter-American Investment Corporation (IIC) is a multilateral organization and member of the Inter-American Development Bank (IDB) Group headquartered in Washington, D.C., in the United States. The IIC is legally a separate entity from the IDB but is a member of the IDB Group along with the IDB and the Multilateral Investment Fund (MIF). [1] The Corporation was founded in 1985 and currently has 45 member countries and 116 employees.[2] Since its inception, the IIC has achieved a AAA rating from Fitch, approved $5.63 billion to private enterprises, and mobilized an additional $3.70 billion in funds from other sources. To date it has completed 924 direct transactions for SME's and financial intermediaries and more than 9,000 companies have benefited from the advisory and training services offered through its suite of financial products.

Culture

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The IIC culture is based on the acronym LIFT


·Leading by example, demonstrating best practices in development effectiveness and risk management

·Innovating by leveraging the IIC's knowledge, resources and market experience

·Financing through a suite of products ranging from loans and subordinated debt to equity

Transforming the clients and sectors we target [3]

Mission

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The IIC promotes private sector development in Latin America and the Caribbean with a focus on small and medium-sized enterprises (SMEs). This is accomplished by helping companies streamline management processes and providing them with financing in the form of equity investments, loans, and guarantees. The overall mission is to promote economic development in regional member countries by fostering the establishment, expansion, and modernization of private enterprises in a manner that complements the activities of the IDB. Over the course of 3 decades, the IIC has leveraged its experience to become a reliable partner and effective catalyst for economic development in Latin America and the Caribbean.

What the IIC Does

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In a sense, IIC financing is seed money. It is also a catalyst for attracting other resources in the form of additional financing, technology, and know-how through cofinancing and syndication, by supporting security underwritings and identifying joint venture partners. Both lending and investing require an appraisal to assess a project’s soundness and prospective success. As part of its appraisal process, the IIC advises customers on project design and financial engineering, and helps them put together a financial plan.

Projects that hope to qualify for IIC financing must offer profitable investment opportunities. In addition, they must foster economic development in some way—whether by creating jobs, broadening capital ownership, generating net foreign exchange income, facilitating transfers of resources and technology, utilizing local resources, encouraging local savings, or promoting the economic integration of Latin America and the Caribbean. Environmentally sensitive projects must include provisions for specific preventive or restorative measures. [4]

Two key categories of IIC operations are: Advisory and Training Services and Financing Activities

Advisory and Training Services

SMEs require more than mere financing for sustainable growth—they also need advisory and training services. Businesses face many hurdles to competition in open markets, including management, planning, and strategic challenges. Over the years, the IIC has identified several key areas in which SMEs are often in need of assistance. In response to this need, the IIC has put together a comprehensive package of value-added services for SMEs under the FINPYME® brand.

Advisory and training services benefit small and medium-size customers who are the main focus of IIC activities in Latin America and the Caribbean. The advisory and training products and services offered to IIC customers help them strengthen management skills, correct environmental deficiencies, perform necessary sector and market studies, and meet other technical challenges.[5]

Financing Activities

The IIC offers financing to businesses that lack access to medium- or long-term resources on the capital and financial markets. The long-term financing products used by the IIC for to this end include direct loans, direct equity or quasi-equity investments, lines of credit to local financial intermediaries for onlending in the form of smaller loans, agency lines with local financial institutions for joint lending, investments in local and regional private equity funds, and guarantees for and investments in capital market offerings. The Corporation finances expansion projects in every economic sector (with the exception of the trade and manufacture of arms, gambling, and real estate speculation). It also finances greenfield (new) projects on a limited and selective basis. Financing may be used for local and foreign currency investments in fixed assets, permanent working capital, and to cover pre-operating costs. Though the IIC does not assume a managerial or administrative role in any of the enterprises in which it makes equity investments, it may request representation on the company’s board of directors.[6]


Organizational Structure

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Board of Governors

The IIC is owned by 45 countries, of which 26 are regional developing member countries and 19 are non-regional member countries. Member countries are represented by the Board of Governors of the IIC. All of the IIC's powers are vested in its Board of Governors, which consists of one governor and one alternate governor appointed by each member country. Among the powers of the Board of Governors that cannot be delegated to the Board of Executive Directors are the admission of new member countries, the engagement of external auditors, approval of the IIC’s audited financial statements, and amendment of the Agreement Establishing the IIC.

[7] Board of Executive Directors

The Board of Executive Directors is responsible for the IIC’s strategic direction. The Board is comprised of 13 Executive Directors and 13 Alternate Directors who represent one or more IIC member countries. Board of Directors members are elected by the Board of Governors for a period of 3 years with the possibility of one term renewal. The President of the IDB Group chairs the Board of Directors. The Board of Directors performs its duties full time at the IDB Group headquarters in Washington DC and regularly holds formal and executive sessions. The Board is responsible for the conduct of the general operations of the IIC. They supervise The Corporation’s financial statements, approve its administrative budget, and review and approve all policy documents and all loan, equity, and technical assistance operations. Nine of the 13 Board members are elected by the Regional member countries from within the Latin America and Caribbean region. The remaining four are elected by member countries from outside the region.

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References

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  1. ^ http://www.iic.org/en/about-inter-american-investment-corporation
  2. ^ http://www.iic.org/en/about-inter-american-investment-corporation
  3. ^ http://www.iic.org/sites/default/files/documents/pub/en/IIC_Annual_Report_2013_English.pdf
  4. ^ http://www.iic.org/en/about-us/what-we-do
  5. ^ http://www.iic.org/en/about-us/technical-assistance
  6. ^ http://www.iic.org/en/about-us/iic-financing
  7. ^ http://www.iic.org/en/about-us/board-governors
  8. ^ http://www.iic.org/en/about-us/board-executive-directors
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