Credit Program with Institutional Strengthening for Non-Conventional Intermediaries

                              NICARAGUA


SECTOR:             Financial

PROJECT NAME:       Credit Program with Institutional Strengthening for Non-
                    Conventional Intermediaries
                    (789/OC-NI)

TOTAL COST:         $29.5 million

FINANCING:
      IDB           $23.6 million
    LOCAL           $ 5.9 million

DATE OF APPROVAL:   November 24, 1993

GENERAL DESCRIPTION:The objectives of this program are to provide credit to
                    urban and rural small and microenterprises (including
                    farmers) and to improve the financial management and
                    credit administration of non-conventional financial
                    intermediaries through institutional strengthening. 

                    The program has two components:  (a) a credit component,
                    to be implemented by the Financiera Nicarag�ense de
                    Inversiones and commercial banks, which will onlend to
                    individuals, microenterprises, commercial intermediaries
                    and mutual financial organizations at prevailing market
                    interest rates for investments and working capital
                    requirements; and (b) institutional strengthening, to be
                    implemented by an autonomous agency, Instituto PAMIC
                    (Programa de Apoyo a la Pequeña y Microempresa),
                    which will assist at least 30 "non-conventional"
                    financial institutions, such as non-governmental
                    organizations (NGOs), cooperatives and foundations, to
                    strengthen their financial management and credit services
                    to small and microenterprises.


                    NOTE ON PROCUREMENT PROCEDURES

                    The funds from this loan will not be used for procurement
                    purposes.  The proceeds of the financing will be used by
                    qualifying intermediary financial institutions for on-
                    lending operations and to provide needed resources for
                    small and microenterprises in Nicaragua, by financing
                    fixed assets, working capital and technical assistance.


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CONSULTANTS:        The institutional strengthening component will require
                    high-level experts, such as a director of financial
                    services (with background in finance and credit
                    administration) and an expert in the development of
                    financial cooperatives.  In addition, the program will
                    contract seven experts specializing in the following
                    areas: general accounting financial administration,
                    automated information systems and business
                    administration.  Short-term consultants will also be
                    contracted in other areas related to institutional
                    strengthening of the program.

GOODS AND EQUIPMENT:Not applicable.

CIVIL WORKS:        Not applicable.

EXECUTING AGENCIES: (1)  For the credit component:

                         Financiera Nicarag�ense de Inversiones
                         Apartado 1848/316
                         Managua, Nicaragua
                         Telephone:(505-2) 278-5815
                         Fax:      (505-2) 278-5813
                         Contact:  Mr. Rodolfo Delgado
                                   Executive Director

                    (2)  For the institutional strengthening component:

                         Instituto PAMIC
                         c/o Ministerio de Economía y Desarrollo
                         Carretera a Masaya
                         Managua, Nicaragua