A USD43 MILLION OPERATION WILL IMPROVE ACCESS TO FINANCING, INVESTMENT IN PRODUCTIVE INFRASTRUCTURE AND TECHNICAL ASSISTANCE
The Inter-American Development Bank has approved a USD40 million loan to Panama, complemented by a local contribution of USD3 million, to implement an ambitious program financial inclusion and indigenous entrepreneurship in the country's 12 indigenous regions. The plan places priority on the demands of indigenous peoples and the interventions of the economic pillar that are all contained in the National Plan for Integrated Development of Indigenous Peoples (PNDIPI in Spanish),which was approved by the government of Panama after a lengthy period of consultation with Panamanian indigenous leaders.
Panama is home to seven indigenous peoples (the Ngäbe, Guna, Emberá, Wounaan, Buglé, Naso-tjerdi and Bri-bri) with a total of 574,353 people, or 14.7% of the country's population. An advanced system of recognition of indigenous autonomy has allowed for a strengthening of traditional rule for these peoples: each one has its own government, with highly representative structures and robust social capital. Still, the poverty rate is high at 79.6% and there are major gaps in access to basic services and financial services and in development indicators for indigenous peoples as compared to non-indigenous ones.
This program will address business initiatives proposed by companies or organizations run by indigenous people, helping to boost their revenue by widening access to financial services, building productive infrastructure in indigenous districts and territories so as to promote the inclusion of these businesses in the value chain, and providing non-financial services such as training and continuing technical assistance, accompanied by pre-investment.
According to government data, in Panama there are 22 indigenous organizations with legal status and 41 cooperatives. So the number of business people who could benefit from this program is about 1,400. Add to this 44,718 households with at least one indigenous entrepreneur in the areas where investments will be made in productive infrastructure. These families will also see a positive impact from the program.
The project features a total of USD43 million, of which USD40 million will be financed through a multiple works investment loan drawn from IDB ordinary capital. The loan has a payback period of 24 years, a grace period of 6.5 years and an interest rate pegged to the LIBOR. The remaining USD3 million will be provided by the government of Panama.
About the IDB
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. The IDB is the leading source of multilateral financing for Latin America and the Caribbean.