The Inter-American Development Bank (IDB) has approved the second phase of an operation to support financial system reforms aimed at boosting up Colombia's economic growth. The loan is for $450 million.
The reforms being pushed forward by the government of Colombia seek for safeguard the country’s macroeconomic stability, enhance productive development and public-private partnerships financing, strengthen the financial system’s regulation and monitoring progress, and improve financial inclusion.
Among other things, the program will seek to ease the access of micro-, small- and mid-sized enterprises (MSMEs) to financing through the use of secured transactions and electronic invoices as financial collateral. It will also deepen the structuring of productive infrastructure projects through the Financiera de Desarrollo Nacional (FDN).
Additionally, Colombia is striving to achieve a greater degree of financial system transparency and to foster the development of its capital markets in line with its process of joining the Organization for Economic Cooperation and Development (OECD) and its agenda of financial integration within the Pacific Alliance framework.
Furthermore, issuance of the Financial Inclusion Act’s implementing regulations and implementation of financial education initiatives will provide enhanced access of unbanked persons to financial services.
This operation is being carried out under the Programmatic Policy-Based Loan modality, designed to provide financial support to priority reforms in member countries.
The loan is for a 20-year term, with a 5.5-year grace period and LIBOR-based interest rate.
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.