CABEI and DFC sign agreement for $100.0 million line of credit for the reactivation of MSMEs


The loan will support lending by financial institutions in Guatemala, El Salvador, and Honduras to MSMEs affected by the COVID-19 pandemic.

Tegucigalpa 21 June 2021.- The Central American Bank for Economic Integration (CABEI) and the U.S. International Development Finance Corporation (DFC) have committed a new credit line to provide resources to micro, small, and medium-sized enterprises (MSMEs) in Guatemala, El Salvador, and Honduras. As part of this initiative, the U.S. Agency for International Development (USAID) will work with MSMEs and financial institutions to maximize the impact of the funds. 

The $100 million loan will be available to financial intermediaries in Guatemala, El Salvador, and Honduras with a focus on lending to MSMEs. This new funding is part of the "Financial Sector Support Facility for the financing of MSMEs,” a component of CABEI’s Emergency Program for COVID-19 and Economic Reactivation approved by the bank in March. With DFC´s support, CABEI will be able to finance working capital, business improvements and investment needs of MSMEs in key sectors including food and agriculture, renewable energy, energy efficiency, hospitality and tourism, construction, media, industrial, and service businesses.

The Executive President of CABEI, Dr. Dante Mossi, highlighted the importance of alliances with DFC and other development finance institutions. These partnerships bolster CABEI’s efforts to help MSMEs reactivate and grow their businesses in the context of the pandemic. The facility will enable them to invest in new product lines and services. "MSMEs contribute 33% of the region’s GDP and are a key driver in creating jobs, employing around 45% of the workforce. These investments will generate more employment in our region," he said.

As part of its COVID-19 response initiative, DFC is working to provide timely and effective support to MSMEs. The loan to CABEI is an example of DFC’s approach of working closely with financial institutions to rapidly provide emergency liquidity to MSMEs affected by the economic impact from the pandemic.

To amplify the impact of the DFC loan, USAID will work with CABEI to provide technical assistance to financial institutions and MSMEs in eligible countries. This assistance will help entrepreneurs improve their business skills and acumen. USAID and CABEI will also guide financial intermediaries in adapting their product portfolio to the specific needs of underserved businesses.

CABEI, DFC, and USAID recognize the need to support MSMEs in an agile and timely manner. DFC´s loan to CABEI demonstrates a collective recognition of each entity’s fundamental role in protecting formal employment and the economic and social recovery of the region.