Costa Rica development bank SBD is prepared to issue loans for rebuilding hard-hit areas in the aftermath of late-season Hurricane Otto, which swept across the isthmus last week bringing loss of life, torrential rain and damaging winds to the nation and northern neighbor Nicaragua.
Up to 350mn colones (US$630,000) may be requested of the bank in loans, which will have a 6% annual interest rate, and for which payments may begin as late as one year after receipt (in the 13th month), reported local newspaper La Nación.
The range of the loans is meant to address the economic needs of micro, small and mid-sized businesses.
The loans are available as of Monday (Nov 28).
"If a person loses absolutely everything, starting up again implies the possibility of debt refinancing, recovery of economic activity and a period to be able to regenerate [cash]flows needed to repay the loan and sustain personal activity," said SBD director Miguel Aguiar.
The bank's natural disaster fund was upped Friday from 6bn pesos to 20bn pesos in coordination with the government to react to the extraordinary event.
Otto made landfall midday Thursday on the southern extreme of Nicaragua's Mosquito Coast, some 20 miles north of the Costa Rican border, bringing torrential rain and perilous 175kph winds.
While it is fortunate that the eye of the hurricane was small and came ashore in a sparsely populated region of coastline, many of those rural communities in the hardest hit areas are now isolated by the effects of the storm and it may take time to assess the full impact on those populations.
The storm made the southernmost landfall for a hurricane and was the strongest hurricane ever recorded this late in the season for the Atlantic basin.
While there were minimal insured losses in the region, a greater economic impact could emerge from damages to crops hit by the storm, particularly coffee plantations nearing harvest across the impact, which could potentially create shortages of the major regional export.
The SBD, funded by the country's commercial banks, has undergone changes this year to be able to act more inclusively and boost second-tier lending to micro-finance institutions.