Interviews
IDB Colombia program to improve access to financial services
06 Dec '07
2 min read
The Inter-American Development Bank announced the approval of a $300 million loan to Colombia for a program to promote business competitiveness that will help create conditions conducive to sustainable and inclusive economic growth.
The program will articulate and consolidate a nationally and subnationally integrated system to promote competitiveness, reduce transaction costs and improve market access for businesses. It will also improve access to financial services, especially for microenterprises, small and medium-sized businesses and low-income groups.
"Businesses in Colombia have limited access to financial services, in terms of both volume and coverage," said IDB Team Leader Luis Alberto Giorgio. "The Association of Banks of Colombia estimates that just 29.2% of the population over 18 years of age has access to some type of financial service."
"The government is basing its strategy for improving access to financial services on its Banca de las Oportunidades ("Bank of Opportunities") initiative, which is designed to create the conditions conducive to access to the formal financial system," added Giorgio.
This operation is the second one designed to enhance competitiveness in Colombia. A previous operation for $200 million was completed in September 2006. It supported the Government of Colombia in the design and implementation of new public policies to improve the business climate.
In the context of macroeconomic stability, thenew project will focus on promoting an institutional framework for competitiveness and improving institutional capacity for implementing trade agreements. It will also help reduce transaction costs and facilitate market access for businesses by simplifying procedures and by improving transparency and market information for businesses.
The Ministry of Finance will carry out the project. The loan is for a 20-year term, with a five-year grace period, at LIBOR interest rates. This operation was approved under the Bank's Local Currency Facility, which allows for the conversion of disbursements and outstanding balances into local currency.
The program will articulate and consolidate a nationally and subnationally integrated system to promote competitiveness, reduce transaction costs and improve market access for businesses. It will also improve access to financial services, especially for microenterprises, small and medium-sized businesses and low-income groups.
"Businesses in Colombia have limited access to financial services, in terms of both volume and coverage," said IDB Team Leader Luis Alberto Giorgio. "The Association of Banks of Colombia estimates that just 29.2% of the population over 18 years of age has access to some type of financial service."
"The government is basing its strategy for improving access to financial services on its Banca de las Oportunidades ("Bank of Opportunities") initiative, which is designed to create the conditions conducive to access to the formal financial system," added Giorgio.
This operation is the second one designed to enhance competitiveness in Colombia. A previous operation for $200 million was completed in September 2006. It supported the Government of Colombia in the design and implementation of new public policies to improve the business climate.
In the context of macroeconomic stability, thenew project will focus on promoting an institutional framework for competitiveness and improving institutional capacity for implementing trade agreements. It will also help reduce transaction costs and facilitate market access for businesses by simplifying procedures and by improving transparency and market information for businesses.
The Ministry of Finance will carry out the project. The loan is for a 20-year term, with a five-year grace period, at LIBOR interest rates. This operation was approved under the Bank's Local Currency Facility, which allows for the conversion of disbursements and outstanding balances into local currency.
Inter-American Development Bank
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