The Inter-American Development Bank today announced today the approval of $100 million in financing to enhance the productive capacity and competitiveness of small businesses and microenterprise in Argentina.
The project is designed to increase the availability of credit to the sector on a sustainable, continuous, and expanding basis by encouraging intermediary financial institutions to take advantage of opportunities and generate self-sustaining lending to that sector.
The total cost of the program is $200 million, of which $196 million consists of a credit component to be channeled through regulated intermediate financial institutions that meet the eligibility criteria. This includes making increasing use of their own resources to lend to the targeted sector.
A second component is $4 million in technical assistance to promote the transfer of appropriate lending technology to eligible intermediate financial institutions and to provide institutional strengthening to the government agency* carrying out the program.
The IDB financing consists of two loans, one for $98 million for the credit component, at a variable annual interest rate that is now 6.98 percent, and another for $2 million in the equivalent of Argentine pesos at a 4 percent annual interest rate.
Both loans are from ordinary capital for 20-year terms with four-year grace periods.
The IDB financing is matched by local counterpart funds.