WASHINGTON, D.C. /eNewsChannels/ NEWS: Today, the Department of State and the U.S. Agency for International Development (USAID) announced partnerships with three private banks in Latin America that will make available $98.5 million in local lending exclusively for small and medium-sized enterprises (SMEs). Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson stated that “these partnerships reflect the United States’ commitment to job creation, entrepreneurship, and the economic success of citizens of these nations.”
There are approximately 34 million businesses in Latin America and the Caribbean; however, many cannot grow to their potential due to insufficient access to capital. These new agreements will open $60 million in local financing in Mexico, $25 million in El Salvador, and $13.5 million in Nicaragua. Approximately 4,000 SMEs will access credit through these guaranteed loans, which will help entrepreneurs grow their businesses and create local jobs.
In El Salvador, where SMEs account for half of all economic activity in a nation of 6 million people, a new USAID partnership with Banco Davivienda will open $25 million for SMEs. Banco Davivienda will lend to SMEs on a longer term basis and reduce collateral requirements for approved borrowers.
In Nicaragua, a new USAID credit guarantee with Banpro, a Nicaraguan commercial bank, will open $13.5 million in lending for SMEs, particularly for those along the underserved Caribbean coast.
In Mexico, banks often do not lend to non-bank financial institutions (SOFOMs), a primary source of financing. A new partnership between USAID, Credit Suisse, and Velifin, a Mexican SOFOM, will unlock $60 million in private capital for SMEs.
These credit guarantees are supported with Department of State funding under the Pathways to Prosperity in the Americas initiative, a policy-level dialogue that links 16 Western Hemisphere governments that collectively seek to empower small businesses, facilitate trade and regional competitiveness, build a modern and inclusive workforce, and encourage green, sustainable business practices. USAID is a U.S. Government agency that provides economic, development, and humanitarian assistance around the world in support of the foreign policy goals of the United States. USAID’s Development Credit Authority (DCA) works with investors, local financial institutions, and development organizations to design and deliver investment alternatives that unlock financing for entrepreneurs in the developing world.
