The International Finance Corporation (IFC) is considering an investment of up to $40 million in a Peru-focused trade receivables fund, as the World Bank Group member seeks to expand non-bank financing channels for micro, small, and medium enterprises in the country.

The proposed commitment, equivalent in Peruvian soles, would account for up to 20% of total commitments in Compass Fondo de Inversion Adelanto de Efectivo, or Compass FAE, an unlisted, closed-ended fund with a tenor of up to eight years, according to documents seen by DevFiNews.

The fund will provide financing through factoring and reverse factoring, structures that allow businesses to convert receivables into immediate liquidity and improve access to working capital.

IFC’s anchor participation is expected to mobilise at least one dollar of additional private capital for every dollar it invests.

The investment comes as Peru’s credit market remains shallow, with credit to GDP at about 45%. The formal financing gap for MSMEs is estimated at $10 billion, or 4.7% of GDP.

Smaller businesses remain heavily reliant on supplier credit and short-term bank lines, while women-led MSMEs face a wider credit constraint than male-led firms despite lower past-due loan ratios.

MSMEs account for about 31% of Peru’s GDP and nearly 60% of employment, making working-capital access critical for business growth, competitiveness and job preservation.

Development finance institutions have increasingly promoted factoring and supply-chain finance in emerging markets as a way to expand liquidity access for smaller firms without relying solely on traditional bank lending.

The project builds on broader World Bank Group efforts to develop factoring and reverse factoring as alternative financial intermediation channels in Peru.

Compass FAE is managed by Vinci Compass Sociedad Administradora de Fondos, the Peruvian subsidiary of Vinci Compass Investments, which was formed through the December 2024 merger of Vinci Partners Investments and Compass Group Asset Management.

The combined platform manages more than $54 billion in assets.

Vinci Compass SAF Peru, founded in 2002, has closed three funds totaling $400 million.

It pioneered reverse factoring in Peru and previously managed the country’s largest factoring fund, which reached $170 million in assets before closing in 2019.

IFC said the project would also support Peru’s private debt market by broadening financing options in a concentrated lending market dominated by banks and municipal savings institutions.