IDB loan to support micro, small & medium-sized enterprises
24 Apr '07
2 min read
The Inter-American Development Bank announced the approval of a US$1 billion loan to the Banco Nacional de Desenvolvimento Económico e Social (BNDES) to support expansion, integration and access to financing by the Brazilian micro, small and medium-sized enterprises sector.
This loan is the second US$1 billion financing approved in the context of a US$3 billion Conditional Credit Line (CCLIP) for investment projects launched in 2004. The CCLIP allows BNDES to use resources from three successive operations of up to US$1 billion each in a nine-year term.
The loan is guaranteed by the Brazilian Government and will provide medium and long-term financing for investment projects and for permanent working capital to make firms more competitive. Lending in local currency and other innovations such as flexibility in determining the amortization schedule and terms, and prices based on actual cost of financing were authorized for the CCLIP program in 2006.
“This project not only continues IDB collaboration with BNDES to support development and modernization of micro, small and medium-sized enterprises through medium and long-term financing,” said IDB Team Leader Felipe Gómez-Acebo. “It also gives BNDES the possibility of requesting financing directly in reais, allowing for a more efficient handling of exchange rate situations.”
“This type of innovative financing allows the country to avoid the risks of incurring debt in foreign currency,” explained Gómez-Acebo.
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