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CENTRAL AMERICA |
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IDB to help Nicaragua restore credit flow to
the productive sector
A $20 million credit line will channel funds
to the financial system for onlending to
micro and mid-sized productive
enterprises, which is to be used to help the
continuity of the flow of credit to
Nicaraguan enterprises that have been
affected by the international financial
crisis.
The multi sector credit program will channel
medium- and long-term funds to the
Nicaraguan financial system for on lending to
the productive sector, in particular micro-,
small-, and mid-sized enterprises, which
play a crucial role in fueling growth and
jointly account for 84 percent of all
employment in the country.
This sector has been the hardest hit by the
global financial emergency and its ensuing
credit crunch, accumulating a funding
deficit of about $100 million—$60 million
for medium-sized firms and $40 million for
smaller ventures.
The borrower for the program will be the
Republic of Nicaragua and the executing
agency will be Financiera Nicaragüense de
Inversiones (FNI), a financial intermediary
set up 21 years ago by the government.
The Bank's credit line consists of a $10
million credit from its ordinary capital for
a 30-year term, including a 66-month grace
period, at a variable interest rate based on
Libor; and a $10 million loan from the IDB's
concessional Fund for Special Operations,
for a 40-year term and a 40-year grace
period, at a 0.25% interest rate. |
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