The Inter-American Development Bank (IDB) has approved a $300 million policy-based loan to support Dominican Republic’s efforts to boost productivity and tackle the challenges hampering industrial growth.
The funds will help implement reforms in three major areas:
- Strengthening financial regulations to raise productivity, create new institutions to finance productive development, and enhance the security of contracts and financial transactions;
- Improving the business and innovation climate by streamlining administrative processes, fostering competitiveness, and strengthening institutions bent on promoting innovation, production development and quality; and
- Facilitating company registration and formalization practices by expanding the Formalízate digital window, as well as promoting labor formality by consolidating fiscal and social security systems in order to reduce evasion and avoidance of social security contributions.
The program is expected to help modernize and consolidate the financial system in the medium term; promote labor and corporate formalization; diversify production; boost value added domestically; and increase exports.
This loan operation is the second in a programmatic series that aims to provide medium-term support to the program of productivity reforms carried out by the government.
The loan carries a LIBOR-based interest rate and has a 20-year repayment term, including a 5-year grace period.
About the IDB
The mission of the Inter-American Development Bank (IDB) is to improve lives. Founded in 1959, the IDB is one of the main sources of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides consulting services about policies, technical assistance and training to public and private clients across the region.