IDB loan of $150 million will benefit micro, small and medium-sized companies in the agricultural sector, as well as other sectors relevant to the country's economy
Panama will expand access to productive financing for micro, small and medium-sized enterprises (MSMEs) in light of the COVID-19 crisis with a loan of $150 million approved by the Inter-American Development Bank (IDB), the first tranche of a loan for a significant total of $300 million.
The program will prioritize support for the sustainability of agricultural MSMEs and their value chain to support employment due to the crisis, and with a focus on food security. Similarly, the program may also finance other relevant sectors that have been affected by the current crisis.
It is expected to improve the short-term financial capabilities of MSMEs so that they can overcome temporary liquidity problems and continue their operation. In the medium term, productive financing will make it easier for MSMEs to continue operating and meet the increase in demand due to the impact of the crisis.
The program will support the sustainability of MSMEs by measuring its impact with sales revenue and with the percentage of employment on total MSMEs employment in the country.
Program resources will be executed through a trust managed by Banco Nacional de Panamá (BNP), which will act as trustee and executing agency. These resources may be channeled to the beneficiary MSMEs through eligible financial institutions whose focus is on micro and small companies or directly through the BNP.
Panama will receive, by the beginning of 2021, a second loan for another $150 million, totaling a contribution of $300 million as part of the IDB's support for the country's economic recovery.
The IDB loan of $150 million has a repayment term of 25 years, a grace period of five and a half years and an interest rate based on LIBOR.
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.