Capital-based Mercader Financial will be the fund’s first partner in Mexico, receiving a senior loan of USD 15 million from the impact investment fund.
The partners will provide green finance to small and medium enterprises (SMEs), which represent 99% of all private businesses in the country
Luxembourg and Mexico City 18 October 2021 – The eco.business Fund, an impact investment fund that promotes business and consumption practices that contribute to biodiversity conservation, the sustainable use of natural resources, and climate change mitigation and adaptation will finance over USD 80 million to non-banking financial institutions across Mexico that serve SMEs, the backbone of Mexico’s economy. Mercader Financial will be the fund’s first partner in the country receiving a senior loan of USD 15 million intended to finance sustainable measures in the agricultural sector.
Mercader Financial is a non-banking financial institution headquartered in Mexico City and specializing in the financing of vehicles and equipment for small and medium companies in the transport, manufacturing, services, and agribusiness sectors. With plans to grow their green lending portfolio, this investment from the eco.business Fund will assist with their expansion while the technical assistance will contribute to building internal capacity to identify and assess sustainable practices in agricultural lending in the fund's target sectors, which include agriculture, aquaculture, forestry, and sustainable tourism.
Financing will be directed to the acquisition of equipment for protected agriculture or greenhouses for fruit and vegetable production, efficient equipment for the food processing industry, as well as other equipment and technology solutions for production in the grains and fruits value chains, which are linked to reduced land use pressure, and more efficient water resource management. The anticipated impact includes water savings of 66 percent per metric ton of product, reduced fertilizers and pesticides use by 40 percent and 67 percent respectively, decreased energy consumption by up to 60 percent, and up to 60 percent CO2 emission avoidance.
“Mercarder Financial stands out as a strong finance provider for small and medium enterprises in Mexico, thanks to its client-tailored and flexible business approach,” said Dr Jens Mackensen, Chairperson of the Board of Directors of the eco.business Fund. “We are delighted to start distributing funds in Mexico and helping grow sustainable business practices in some of the world’s most biodiverse places. We are already set to provide more than USD 80 million in the next couple of weeks, and we hope to announce many more in the near future.”
“This financing from the eco.business Fund will be directed to protected agriculture which would, for example, bring impacts linked to the reduction of raw material inputs, increased productivity, and the reduction of greenhouse gas emissions by end-borrowers. We are committed to sound practices and supporting sustainable business growth, which we believe this will make a substantial difference both to our company and our country,” said Francisco Deaquino, Mercader Financial’s Director General.”
About the eco.business Fund
The eco.business Fund aims to promote business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources, and to mitigate climate change and adapt to its impacts in Latin America, the Caribbean, and sub-Saharan Africa. By providing financing for business practices that conserve nature and foster biodiversity, the fund seeks investments with both environmental and financial returns. The eco.business Fund provides financing through three avenues: local financial institutions that are committed to the fund’s mission and which have the capacity to reach its target group; directly to its target group (i.e. companies and producers); and in the case of sub-Saharan Africa, to real sector intermediaries. The fund supports sustainable operations in the sectors of agriculture, fishery (including aquaculture), forestry and tourism. Target beneficiaries are those that hold an eligible sustainability certification or those taking out a loan to make eligible sustainable investments in their operations.
Operating together with each of the two sub-funds, are two development facilities that provide high-impact technical assistance to investment partners and final borrowers.
An impact investment fund advised by Finance in Motion, the eco.business Fund was initiated by Germany’s KfW Development Bank and Conservation International with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ). The sub-fund for Latin America and the Caribbean has received funding from the European Commission as well as from numerous other prestigious development finance institutions and institutional investors. The sub-fund for sub-Saharan Africa was launched in 2020 with initial funding from BMZ.
About Mercader Finance
Mercader Financial S.A. holds a 29-year track record operating as the financial arm of Grupo Empresarial G, a conglomerate with approximately USD 1.6 billion in assets established in Mexico, with sector-leading invest-ments spread across various industries, including the automotive manufacturing, agroindustry, real estate, logistics, and financial services. As a regulated Sociedad Financiera de Objeto Múltiple, Mercader is subject to supervision by the national banking regulator, Comisión Nacional Bancaria y de Valores (CNBV) and, as an active participant in the Mexican debt market, complies with the Mexican Securities Exchange’s disclosure provisions.
Media contact eco.business Fund
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Phone: +49 (0)69 / 271 035-171
Media contact Mercarder Financial
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