IDB grant to assist Haitian businesses

WASHINGTON (CMC):

The Inter-American Development Bank (IDB) is providing a US$20 million grant to help Haiti establish a partial credit guarantee fund, to facilitate the restructuring of loans to businesses affected by the January 12 earthquake that destroyed many businesses.

The programme, which will be run by the Banque de la République d'Haiti's Industrial Development Fund, will enable banks and credit unions to restructure loans and provide additional financing to viable companies that suffered damages or losses due to the earthquake.

The IDB said that estimates of loans impaired by the earthquake range in the hundreds of millions of dollars.

"By aiding in the restructuring of such loans, the Haitian central bank would prevent more borrowers from going into liquidation, reduce capital losses for lenders and assist the country's economic recovery," it said in a statement.

Expanded credit access

Under the programme, commercial lenders will request partial credit guarantees from the Industrial Development Fund for eligible restructured loans. The programme will initially focus on loans under one million dollars in order to facilitate the restructuring of financing for small and medium-size companies (SMEs).

"This programme reflects the IDB's strategy of promoting private-sector investment and job creation in Haiti by expanding access to credit. Through a programme launched by its Multilateral Investment Fund, the IDB is relieving Haitian microfinance institutions of earthquake-impaired microcredit portfolios. The IDB's Inter-American Investment Corpora-tion is working on a new social-financing fund aimed at SMEs.

The IDB is also providing Haiti millions of dollars in grants to repair key infrastructure, such as its roads network and its electricity system, and to rebuild or expand industrial parks. In addition, the IDB is advising the Haitian government on improving business