The Inter-American Development Bank (IDB), a multilateral financial institution that promotes economic development in Latin America and the Caribbean, recently approved a loan of USD 150 million to support micro-, small and medium-sized enterprises (MSMEs) in Panama in adjusting to the COVID-19 pandemic “by facilitating access to production-oriented finance.” The funding will be delivered via Banco Nacional de Panamá (BNP), a retail bank owned by the government of Panama.
Among the goals of the investment to is boost employment in “agricultural production and food-processing and trade activities.” The loan has a term of 25 years, a grace period of 5.5 years and an interest rate based on the London Inter-bank Offered Rate (LIBOR). Upon the successful deployment of the loan proceeds, IDB anticipates disbursing a second tranche of the same amount to BNP for the same purpose.
Established in 1904, BNP serves the public and private sectors with 20 branches and total assets of PAB 16.9 billion (USD 16.9 billion) as of 2020.
Established in 1958, IDB promotes “environmentally friendly” economic development via improved health, education and infrastructure in Latin America and the Caribbean. During 2020, IDB reports having issued USD 14 billion in loans and grants, ending the year with assets of USD 152 billion. The institution is headquartered in the US city of Washington.
The IDB Group comprises IDB; the Inter-American Investment Corporation, which uses the trade name IDB Invest; and the Multilateral Investment Fund, which uses the trade name IDB Lab. IDB Invest is active in agriculture, financial inclusion, sustainable energy and transportation. As of June 2020, it 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 Harriet Ritchie, Research Associate
Sources and Additional Resources
IDB press release
https://www.iadb.org/en/news/panama-strengthen-msmes-sustainability-amid-pandemic-idb-support
BNP homepage
https://www.banconal.com.pa/
BNP 2020 annual report
https://www.banconal.com.pa/images/pdf/Banconal_-_Resumen_Financiero_Q4_2020_ESPA%C3%91OL.pdf
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