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Honduras to boost human capital of families in extreme poverty with support from IDB

Loan of $110 million will benefit 80,000 households in west of country

The Inter-American Development Bank has approved a $110 million loan to Honduras to boost human capital in minors within families living in extreme poverty in rural areas of the west of the country.  

The program seeks to stimulate the use of education, health and nutrition services and support household consumption by financing money transfers. The goal is to reach at least 80,000 households taking part in an initiative called the Bono Vida Mejor. The amount of the average annual transfer will be $340 per home, which is equivalent to 7,250 Honduran Lempiras. 

Ninth-grade education will be improved by upgrading and expanding infrastructure, information technology, educational materials and teacher training. The program will expand services to an additional 30,000 students, under the flexible mode carried out by the Education Secretariat and the Honduran Institute for Education by Radio.

Additionally, the program is designed to reduce the incidence of anemia in children aged four and under by 10 percent. In order to achieve this, financing will be provided for the purchase of micronutrients and deworming medication, which will be earmarked for 45,000 children. Also, pre- and post-natal care for women will be improved. 

The initiative seeks operational improvements to make the Bono Vida Mejor program work more efficiently. That means focusing on those households in extreme poverty and adopting a transfer system based on compliance activities on the part of each member of the household. It will also promote payments via private banks in order to increase the frequency and regularity of payments, while reducing wait times, costs and security risks that women incur when receiving the transfer. 

The Bono Vida Mejor (Better Life Voucher) is Honduras’ main tool for fighting poverty, reaching 350,000 households that account for 30 percent of those in extreme poverty and 25 percent of all poor people at the national level. The program has helped around two million Hondurans, and operates in nearly 7,200 schools and 900 health care facilities. 

The $110 million IDB financing package is made up of the following: $77 million from the ordinary capital fund with a payback period of 30 years and a grace period of six years; and $33 million from the Fund for Special Operations with a payback and grace period of 40 years. The local contribution will be $11 million for a total program cost of $121 million. The executing body is the Secretariat of State for Development and Inclusion.