Haiti - Economy : $20 million for businesses
The program, which will be run by the Banque de la République d’Haïti’s Industrial Development Fund, will enable banks and credit unions to restructure loans and provide additional financing to viable companies that suffered damages or losses due to the earthquake and face difficulties in servicing their current loans.
Estimates of loans impaired by the earthquake range in the hundreds of millions of dollars. By aiding in the restructuring of such loans, the Haitian central bank would prevent more borrowers from going into liquidation, reduce capital losses for lenders and assist the country's economic recovery.
Under the program, commercial lenders will request partial credit guarantees from the Industrial Development Fund for eligible restructured loans. The program will initially focus on loans under $1 million, in order to facilitate the restructuring of financing for small and medium-size companies.
This program reflects the IDB's strategy of promoting private sector investment and job-creation in Haiti by expanding access to credit. Through a program launched by its Multilateral Investment Fund (MIF), the IDB is relieving Haitian microfinance institutions of earthquake-impaired microcredit portfolios. The IDB's Inter-American Investment Corporation (IIC) is working on a new social financing fund aimed at SMEs.
The IDB is also providing Haiti tens of millions of dollars in grants to repair key infrastructure, such as its roads network and its electricity system, and to rebuild or expand industrial parks. In addition, the IDB is advising the Haitian government on improving business conditions and assisting its efforts to attract foreign investment in manufacturing, agriculture and tourism.
In preparing the partial credit guarantee program, the IDB worked closely with Haitian authorities and with officials from the World Bank and the U.S. Department of Treasury. The Haiti Reconstruction Fund is contributing $12.5 million to the program and World Bank is providing $2.5 million.
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