New three-pronged development bank to target SMEs, strategic sectors - Eclac

Wednesday, September 14, 2011

El Salvador's proposed new state-run development bank will have three branches to meet the government's different social aims, according to a new report by the UN Economic Commission for Latin America and the Caribbean (Eclac).

The bank is meant to address high levels of financial exclusion in the country, the president of the Salvadorian congress' economic committee, Francisco Zablah, said earlier this month. The committee is currently drafting a bill to create the bank.

According to Eclac, the first branch of the development bank, Fondo Nacional de Desarrollo, will provide credit to micro, small and medium-sized businesses and will have initial capital of some US$365mn.

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The second branch, Banco Multisectorial de Inversiones, will channel funds toward strategic sectors such as agriculture, heavy industry and tourism. A similar scheme currently exists in Venezuela.

The third branch, Fondo Salvadoreño de Garantías, will provide loan guarantees and will have initial capital of US$20mn.

To read Eclac's full report, go to this link