An Emerging Hub?

President Correa recently said in an interview that his number one goal for the country was social and economic development. What role does Corporación Financiera Nacional (CFN) play in that?

CFN is more active on the financial and economic development side. The government has always been trying to foster a stronger relationship with the private sector. Most of the infrastructure and investment is at an adequate level, and our roads, airports, and energy infrastructure is in place. Education and healthcare are also crucial areas for further investment, and once we have all those basics set up we can invite the private sector to join us in making this model sustainable. Their role is really important. We want at least to maintain the current level of investment, not relying only on the public sector and government side. You have to invite other partners to help us deal with this model. In terms of CFN’s role, we are an economic group; not just a financial institution or a bank. We recently went to market with a program called Progresar, which comprises three products. The first one is the National Guarantee Fund, which is essentially an engine for SMEs. The second is long-term financing for fixed assets. Both products already have clients. The third one we are working on is seed capital for entrepreneurs. We will also likely offer venture capital. Once these programs start up and evolve they can enter the market. Those are the three major projects we plan to offer to foster the transformation of the country’s productive matrix.

Do you think that the current level of development of Ecuador’s capital markets is a challenge that is holding back economic development?

Unfortunately, it is. We now have a new law that we hope will encourage new investors to tap the market. We perceive the capital markets as a financing tool, which is why CFN also helps by buying papers. Of course, it is a shallow market, but at least we are helping at a modest level. The idea is to introduce more players and to get more people to invest in the capital markets and local companies, or any companies that are listed. The secondary market is of paramount importance to deepen the market. We foresee companies not only relying on loans, but also tapping the capital markets.

What is your vision of the Ecuadorean economy and its international role over the coming decade?

I am really confident in what we are doing, and we should continue on this road. Both the government and the private sector have made helpful contributions to developing the national economy. Over the coming years, there will be more Ecuadorean companies exporting value-added goods, and the most relevant element, over 5,000 Ecuadorean students that are studying abroad, at some of the best universities in the world, will make a world of difference. The country will be on the path to becoming a knowledge hub a decade from now. Even today, without that superb benefit, we have a different approach to life. Citizens have improved their living standards, and have developed a better attitude toward education.

What are the strengths of Ecuador as an investment destination?

Investment in human capital and knowledge should come first. Back to 1997, when Intel was trying to establish a plant in Latin America, its staff visited Chile, Brazil, and some other countries in Central America. They had been considering Chile, but they ended up going to Costa Rica, since the country was committed to preparing engineers and had established technical institutes and universities that would make Intel’s investment sustainable by providing human capital. Educated people will always make the difference. Of course, many other conditions had to be met as well, such as a safe and secure environment and adequate regulations.