WASHINGTON, Nov 10, CMC -The Inter-American Development Bank (IDB) has approved a US$15 million global credit programme to expand access to financing for micro, small, and medium-sized enterprises (MSMEs) in Belize.
The IDB-backed programme will support the establishment of Belize’s first guarantee fund for MSMEs, aimed at mobilizing medium- and long-term financing from local financial institutions for productive investments to support MSMEs’ growth, while enabling longer tenors that are better aligned with the businesses’ growth needs.
MSMEs account for 90 per cent of businesses in Belize and generate 50 per cent of private-sector employment and income. But the IDDB said that yet only 18 per cent of them have a loan or line of credit from a financial institution.
It said that the programme seeks to address key barriers limiting their access to credit, including insufficient collateral, limited information on borrowers’ credit history, short loan maturities, and risk aversion among local financial institutions.
The IDB, through the programme and technical assistance, will also provide capacity building to strengthen the governance and operation of the guarantee fund, which will be setup by the Ministry of Finance, and enhance Belize’s Development Finance Corporation’s ability to manage, promote, and monitor the fund.
The IDB global credit programme has a maturity period of 25 years, a grace period of 5.5 years, and an interest rate based on the Secured Overnight Financing Rate (SOFR).
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