The Inter-American Development Bank (IDB) has approved a $19.96 million loan to boost the sustainability of micro, small and medium enterprises (MSMEs) in the face of the COVID-19 crisis, to support employment in Honduras.
MSMEs are a key component of the economy’s productive fabric and employment of Honduras, accounting for more than 70 percent of total jobs. The Global Credit Program for the Defense of the Productive Fabric and Employment will support the short-term financial sustainability of MSMEs in the country and promote their economic recovery by providing them access to working capital financing.
The program will help MSMEs overcome temporary liquidity problems and meet their commercial and financial obligations by supplying working capital to normalize their business cycle.
The funds will support the Honduran Bank for Production and Housing (BANHPROVI) efforts to provide advance payments and rediscounting lines, and to provide guarantees to intermediate financial institutions so that these in turn can offer MSMEs new credit for working capital.
The program will focus on serving MSMEs related to tourism, the country’s most affected productive sector. The program’s resources are expected to benefit about 1,000 MSMEs in the tourism sector that have been badly hit by the crisis. Access to credit can have a positive impact on their sustainability, employment levels and sales.
This loan is part of an assistance package to help Honduras cope with the COVID-19 sanitary emergency and its health, social, economic and fiscal impacts. The operation was approved under new simplified procedures adopted by the Bank to speed up its support to regional countries’ efforts to tackle the effects of the pandemic.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source 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 policy advice, technical assistance and training to public and private sector clients throughout the region.