The Inter-American Development Bank (IDB) will help Peru increase its efficiency in public administration with a loan $20 million loan that seeks to boost the use of electronic payments.
Currently 38 percent of direct deposits into bank accounts to employees, pensioners, suppliers and contractors are made electronically and that percentage is likely to increase 90 percent by 2014. Among other objectives, it is expected that 100 percent of the national and regional government executing units and the budget units of the local governments record their financial transactions in real time through the Integrated Financial Management System.
The program will develop and implement tools and systems for programming, execution and accountability of income, expenditures and public financing, integrated and aligned with a measurement of outputs and outcomes. This project will strengthen the following areas:
- Modernization of public financial management processes and systems to design, develop and implement the financial management information system.
- Building institutional capacity for public financial management to strengthen the capacities of the Ministry of Economy and Finance in financial management.
- Institutionalization of budget management tools to improve the quality of spending.
Peru has managed public resources more efficiently and has increased access to information by citizens. This new project is expected to improve efficiency in financial and expenditure management.
The IDB financing consists of a $20 million loan for a 25-year term, with a 5-year grace period and a variable interest rate based on LIBOR.