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Nicaragua to improve productivity with IDB support

$45 million loan will improve the country’s business climate and competitiveness

The Inter-American Development Bank (IDB) has approved $45 million loan to help improve productivity in Nicaragua.

Boosting productivity is key to increasing living standards and reducing poverty in the country. Nicaragua’s economic structure is based on small, low-productivity companies: micro, small, and medium sized enterprises represent more than 90 percentof the business universe, contribute close to 40 percentof GDP, and generate approximately 60 percentof jobs. The agricultural sector plays a leading role in the economy, representing 22 percent OF GDP, 60 percent of jobs, and 75 percent of exports.

The resources will assist the country in maintaining a stable macroeconomic environment and strengthening financial regulation to improve access to finance for companies and production-oriented projects. Moreover, they will contribute to improve regulation to enhance business and competition climates, and strengthen institutions for productive development.

The IDB financing consists of a $22.5 million 30-year loan from the Bank’s ordinary capital with a 5-½ -year grace period and fixed interest rate. An additional $22.5 million is from the Fund for Special Operations for a 40-year term, with a 40-year grace period and 0.25 percent interest rate.

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