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IDB approved $17.5 million loan to Chile to strengthen pension system management and information

The Inter-American Development Bank announced today the approval of a $17.5 million loan to Chile to strengthen its pension system management and information and streamline its core processes.

“This program will support the pension system’s policy-making, supervision, coordination and evaluation to improve its operational consistency and coordination,” said IDB team leader Juan Carlos Cortázar. “It will integrate pension information systems, including noncontributory benefits,  to enhance the performance of customer service mechanisms in a more efficient and transparent way.”

“This initiative will help expand coverage of the pension system to all users, increase contribution density and provide more equitable access to benefits, particularly to low-income workers and women,” explained Cortázar. “It will also strengthen user participation in the pension system and will promote activities to develop a greater sense of responsibility among users of the pension system and among citizens as a whole.”

The Chilean Government has pledged to set up a social protection system that covers citizens throughout their lives with better jobs, as well as improvements in the educational, health, housing and social security systems. The focus is on better social safety nets for the population, especially those at highest social and economic risk.

The IDB is supporting Chile in its efforts to upgrade the pension system’s institutional and management processes and information systems in line with its strategy to strengthen the social protection system.

The loan will be for a 10-year term and a 3-year grace period, at an adjustable interest rate. Local counterpart funds will match the IDB loan.

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