Supporting micro, small, and medium enterprises in Paraguay

April 20, 2022

Interview with Rodrigo Ortiz, director of Banco Continental (Paraguay)

Micro, small, and medium enterprises (MSMEs) play a key role in Paraguay’s economy. With a presence across the country, from Itapúa to Boquerón, they represent a large majority of the economic units and employ around 80 percent of the working population. However, Paraguayan MSMEs face an obstacle that cuts across many developing countries: the gap in access to credit, which limits their growth and consolidation. In a complex context marked by the COVID-19 pandemic, many found relief thanks to Banco Continental’s support.

Founded in 1980, Banco Continental has established itself as the leading bank in the Paraguayan market in terms of loans and net worth. The institution, which has been working with IFC since 2008 and currently has over 190,000 clients, provides financing and seeks to strengthen the competitiveness of MSMEs, substantial actors for the creation of a dynamic and inclusive economy.

Two years into the pandemic, we spoke with Rodrigo Ortiz, director of Banco Continental, to learn more about the bank's operations — particularly with reference to MSMEs during the crisis — digitization, sustainable bonds, and more.

Rodrigo Ortiz, director of Banco Continental (Paraguay). Photo: Courtesy of Banco Continental

How important are MSMEs in Banco Continental's business strategy? What actions has the bank taken to help them face the challenges of the COVID-19 pandemic?

MSMEs are at the core of our strategy, and they make up a large part of our credit portfolio. We aim to continue strengthening them, providing them with products and services that adapt to the realities of the economic sector in which they operate and ones that are based on the innovation and commitment we have as the largest bank in the country. On the one hand, in the face of the difficulties caused by the COVID-19 pandemic, Banco Continental closely supported its clients, especially the most vulnerable. In the process, we became the private bank with the highest use of the Guarantee Fund of Paraguay (FOGAPY), a government fund created to guarantee MSME operations. On the other hand, we decided to postpone the collection of current loan installments without any additional costs, considering that lockdown measures caused significant constraints to generating cash flow in some sectors. Finally, despite heavy uncertainty, we have continued to finance new projects, based on our experience of more than 40 years in the financial sector.

The pandemic has forced many MSMEs to embrace digitization. How have you supported the digital transformation of your clients?

Indeed, MSMEs have become highly digitized. At Banco Continental, we have been supporting our clients in this aspect long before the pandemic by modifying our internal processes, improving our digital service channels, and creating a digital culture within the organization. The confinement caused by the COVID-19 pandemic gave all these initiatives a strong boost.

What is your view on the financial sector in Paraguay? What opportunities and threats do you envision?

The Paraguayan financial system is characterized by its patrimonial and professional strength. In the last few years, the system has been able to build the necessary confidence for constant and sustained growth. One of the great opportunities continues to be advancing toward greater banking and formalization of the economy so that more people have access to banking products and services as well as investment instruments. The main threats have to do with the external factors that harm the economy.

One of the most effective ways to accelerate growth in Latin America is to empower women-led businesses. What projects is Banco Continental pursuing in this area?

With several projects underway, Banco Continental has been working hard to finance projects with social impact, including those led by women. We intend to continue along the same path, creating new products and services that achieve a greater impact.

In 2020, Banco Continental successfully issued five-year sustainable bonds worth $300 million in international markets. Which are the challenges for the further expansion of these financial instruments?

There are multiple challenges. On the one hand, we must deepen financial education to motivate a greater demand for financing, raising awareness of the benefits of developing these kinds of initiatives, and, on the other, we must continue to create government incentive mechanisms. All actors must be fully aware that business sustainability depends on the activities we engage in.

The relationship between IFC and Banco Continental began in 2008 and has had several significant milestones in these 14 years, including a $100 million investment to expand access to financing for SMEs and agribusinesses in Paraguay. What do you expect from this relationship in the future?

IFC is a fundamental and strategic ally for Banco Continental. We hope to continue strengthening the ties that unite us, exploring business opportunities that allow us to continue opening markets and developing products, so that together, from our leadership position in Paraguay, we continue to contribute to improving the quality of people’s lives in the country.

Published in April 2022