Through credit facilities and financial intermediation, CABEI contributes to the resilience of MSMEs in the face of the COVID-19 pandemic
Tegucigalpa, January 20, 2022.- The measures taken in different countries to prevent the spread of COVID-19 have had adverse effects on their economies, resulting in reduced sales, business closures, layoffs and loss of income in various sectors, such as as micro, small and medium-sized enterprises. enterprises (MSMEs).
In response to their needs and aware that this sector represents a powerful driver of the regional economy, the Central American Bank for Economic Integration (BCIE) structured in 2020 the “COVID-19 Emergency Support and Preparedness Program and its economic reactivation” with the aim to revitalize the economies of countries and has included the “Financial Sector Support Facility for Financing MSMEs” as one of its components.
“It is estimated that there are at least 1.3 million MSMEs in the region, which contribute almost 33% of the Gross Domestic Product (GDP), generate more than 40% of jobs and constitute 85% of the productive base. , which is why for us at CABEI it is of vital importance to protect them, which translates into employment and well-being for the inhabitants of each country”, said CABEI Executive Chairman Dante Mossi.
Thanks to the Facility, made available to CABEI’s allied financial intermediary institutions in all countries, more than 60,000 jobs have been protected, of which 6,588 are rehires of people who had been made redundant at the start of the pandemic. Of the total number of beneficiaries, 79% are men and 21% are women.
By the end of December 2021, the Bank had disbursed US$405.9 million in sectors such as trade, hospitality and tourism, agrifood chain production, renewable energy, energy efficiency, cleaner production , construction and infrastructure, creative industries, information and communication technologies. , service providers, transport and storage, manufacturing and other relevant sectors.
Most of the loans granted were intended for small businesses, followed by micro and medium-sized businesses, with financing conditions that vary according to the type of business, with a maximum amount of USD 5,000,000.
In addition, most of the resources channeled through intermediary financial institutions to MSMEs are directed towards working capital and payment of obligations, followed by consolidation or readjustment of debt and expansion or modification of models. investments, totaling $363.5 million of the total $405.9 million placed.
The Guarantee Fund is another component of this facility, which provides additional support to companies that do not have 100% guarantees at the time of loan application, covering up to 75% of the financing amount.
“This Fund has been a real success and key for the economic revival of the MSME sector, since 81% of microenterprises that have obtained a loan with resources from the Facility have benefited from a guarantee, and today 34.8 million dollars have been committed for this purpose,” Mossi explained.
This program for the benefit of MSMEs is funded with resources from CABEI, the German government through KfW, the European Union and TaiwanICDF, the International Development Finance Corporation DFC and UN Women. CABEI, as the region’s multilateral bank, will continue its mission of supporting Central America in its efforts to achieve higher levels of economic and social development.