CABEI creates a Guarantee Fund of US$28.1 million for the recovery of MSMEs affected by COVID-19
This fund will be set up with a contribution of US$14.0 million from CABEI and US$14.1 million from the European Union through the Latin American Investment Facility (LAIF).
Tegucigalpa September 1, 2020.- The Board of Directors of the Central American Bank for Economic Integration (CABEI) approved the creation of a Guarantee Fund as a complementary financial instrument for credit risk coverage to implement the Financial Sector Support Facility for the Financing of MSMES affected by the COVID-19 crisis.
Dr. Dante Mossi, CABEI’s Executive President, expressed his satisfaction for this approval and highlighted the contribution of the European Union through the Latin American Investment Facility (LAIF), which joins CABEI’s efforts to support its partner countries in the framework of pandemic management through the Emergency Support and Preparedness Program for COVID-19 and Economic Reactivation for up to US$2,360.1 million.
Likewise, Dr. Mossi highlighted that, with the creation of this Fund, CABEI offers a platform for financial, private, public and/or donor entities to channel additional resources to the Fund and thus contribute to facilitating access to credit to MSMEs affected by the pandemic caused by COVID-19.
The objective of the fund is to grant credit guarantees to MSMEs affected by the crisis generated by COVID-19 in order to access financing granted by Intermediary Financial Institutions using CABEI resources, in order to preserve, restore and generate new jobs.
The Guarantee Fund will give great support to financial sector intermediaries to be able to channel a greater volume of resources to MSMEs, since they will be able to leverage new loans that will be supported by this mechanism. The guarantees will have coverage from 25% to 75% depending on the size of the enterprise.
Beneficiaries of this Fund may be all those MSMEs that have been affected by the crisis generated by COVID-19 and that receive credits from Intermediary Financial Institutions (IFIs) that maintain a relationship with CABEI in the Republics of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic.