IDB loan for $10 million will benefit more than 200,000 new users of financial services
Low-income Ecuadorians living in remote areas will have access to better financial services in a project supported by a $10 million Inter-American Development Bank (IDB) loan.
The project seeks to benefit more than 200,000 new low-income users of financial services in remote areas. By 2016 more 2.8 million new financial transactions are expected to be generated by the strengthening intermediate financial institutions – the Popular Finance Structures and the National Payment System. In addition, the program will reduce average processing time per transaction in the National Payment System from 300 to 180 minutes.
"Access to financial services plays a critical development role by promoting economic growth, reducing inequality of incomes, and improving conditions for families living in poverty," said Cristina Pailhé, IDB project team leader. “The objective is to provide the population with access to a range of low-cost services such as savings, payments and transfers.”
The project will include two components. The first consists of a grant fund to support financial inclusion that will be administered by the Central Bank of Ecuador. The latter will co-finance projects for technical assistance, procurement, services, and activities needed to expand the supply of financial services.
The second component is the implementation of the new National Payments System, which will strengthen payment infrastructure through the purchase of hardware, software development and acquisition, training, and dissemination to financial institutions.
The IDB loan is for a term of 25 years, a grace period of 12.6 years, and an interest rate based on LIBOR.