July 8, 2020

IDB loan of 200 million dollars to boost MSMEs in Panama

The Government of Panama reported on Wednesday that it signed with the Inter-American Development Bank (IDB) a loan for 200 million dollars to boost the micro, small and medium-sized business sector (MSMEs).

The loan is for a 15-year term, with a grace period of 5.5 years and an interest rate based on the Libor (London InterBank Offered Rate), said the Ministry of Economy and Finance (MEF) of Panama.

The Panamanian Ministry added that this loan is the first of two independent but technically linked operations under the Policy Based Programmatic Loan (PBP) modality.

The PBPs "provide flexible, liquid (fungible) financing to the borrowing member countries of the Bank to support policy reforms and / or institutional changes in a given sector or subsector," according to IDB data.

The funds contributed by the multilateral will be used to support more than 45,000 micro, small and medium enterprises, including sectors of the creative, digital and tourism industries, the Panamanian government said.

"This financing will be directed to the digitalization of processes with high demand, such as building permits from the Municipality of Panama or commercial movements in the Colon Free Zone (ZLC)", the largest in the continent and located in the Caribbean of Panama.

Also to "encourage private investment, the protection of personal digital data and the digital signature. Additionally, reforms will be included to promote the follow-up of the National Industrial Competitiveness Program, the promotion of the National Quality System and Regional Innovation Systems", said the MEF.

The project will also seek, on the one hand, "to improve institutionality, public-private coordination and the strengthening of human capital for creativity and culture," and on the other, "a strategy for the development of ICT industries that will be promoted. it includes the impulse to new digital financial models, electronic invoicing and research. "

Finally, the institutional framework will be strengthened to provide sustainability and continuity to Panama's tourism promotion efforts and to connect the cultural offer and demand of the tourism sector, the official information said.

The initiative is part of the Program for the Promotion of Competitiveness and Diversification of the Economy, which seeks to maximize the country's capacity to achieve sustainable rates of economic growth.

Panama's economy expanded by 3.7% of gross domestic product (GDP) in 2018, the lowest rate in a decade, and local and international organizations place growth expectations for this year at around 3%.

. (tagsToTranslate) Loan (t) million (t) IDB (t) MSMEs (t) Panama

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