The Inter-American Development Bank today announced the approval of a $300 million rapid disbursement loan to Colombia to assist with a series of reforms to improve the government’s capacity to deal with the most pressing problems in the financial sector and improve its efficiency.
The program, to be carried out by the Finance Ministry,* will support the following measures:
•Strengthen the legal and regulatory framework and the techniques and procedures used to resolve the situation of financial institutions.
• Improve the institutional capacity of the bodies responsible for supervision and working out the problems of financial institutions.
• Resolve the situation of in the first-tier banking sector and of cooperatives supervised by the Banking Superintendency.
• Promote effective measures for promptly addressing the adverse economic situation’s impact on the financial sector.
The loan is for a five-year term, with a three-year grace period, at an annual interest rate of 400 basis points over Libor.
The financing operation is the third by the IDB to Colombia under a new emergency loan program approved by the Board of Governors in 1998 to assist countries whose fiscal accounts were affected by international financial volatility.
Previously, the Bank approved a 350 million loan to help modernize the electricity sector and a $550 million loan to improve the country’s fiscal capacity.