MICROCAPITAL BRIEF: IDB Kicks Off $15m Program to Promote MSMEs in Belize with Eye to Climate, COVID-19 and Women

The Inter-American Development Bank (IDB), a US-based multilateral institution, recently loaned USD 15 million to Belize to provide “production-oriented capital” to 200 micro-, small and medium-sized enterprises (MSMEs). The funding is intended to assist MSMEs, particularly those led by women, in overcoming liquidity problems related to the COVID-19 pandemic, thus preserving jobs. The sectors of focus are those that have been more severely affected by the pandemic, such as agriculture, fishing and tourism. In particular, the sub-loans may be used for “purchases of plant equipment and machinery, improvement of productive infrastructure, plant and process retrofitting to adapt to new public health requirements stemming from the pandemic, as well as the implementation of new technology, techniques and processes.” Of the total funding package, 30 percent is earmarked for developing business models deemed resilient to climate disasters. The loan is to be repaid to IDB within 25 years, including a grace period of five years.

IDB is implementing the program in partnership with Development Finance Corporation Belize, a state-owned development bank, in an effort to assist women entrepreneurs with gender-specific non-financial products and services as well as indirectly, via “gender-awareness training for loan officers.” Established in 1963, Development Finance Corporation Belize offers loans for small and medium-sized enterprises (SMEs), agriculture, fishing, tourist businesses, education, housing, and infrastructure. As of 2019, the bank reported having total assets of BZD 111 million (USD 55 million) and a gross loan portfolio of BZD 102 million (USD 51 million).

Established in 1959, IDB seeks to promote “environmentally friendly” economic development via improved health, education and infrastructure in Latin America and the Caribbean. During 2020, it reports having issued USD 14 billion in loans and grants, ending the year with assets of USD 152 billion.

IDB is a unit of the IDB Group, whose other units are the Inter-American Investment Corporation, which uses the trade name IDB Invest; and the Multilateral Investment Fund, which uses the trade name IDB Lab. Headquartered in the US city of Washington, IDB Group has 48 member countries, including 26 that are located in Latin America and the Caribbean.

IDB Invest focuses on promoting economic development through projects in agriculture, financial inclusion, sustainable energy and transportation. As of June 2020, IDB Invest had USD 13 billion in assets under management, deployed via 385 clients in 25 countries. Established in 1993, IDB Lab is an “innovation lab” that tests models for facilitating “inclusive growth.” During the third quarter of 2020, IDB Lab approved 16 projects with a total value of USD 9.5 million.
By Divya Deshmukh, Research Associate

Sources and Additional Resources

IDB press release
https://www.iadb.org/en/news/belize-will-support-financial-sustainability-msmes-face-covid-19-crisis

Development Finance Corporation Belize homepage
https://www.dfcbelize.org/

Development Finance Corporation Belize annual reports
https://www.dfcbelize.org/who-we-are/download-center/

Previous MicroCapital article on IDB
https://www.microcapital.org/microcapital-brief-belize-credit-union-league-idb-partner-on-green-microfinance-as-part-of-caribbean-ecomicro-program/

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