The Inter-American Development Bank (IDB), a US-based multilateral finance institution that operates in Latin America and the Caribbean, recently announced it will extend a loan of USD 450 million to the government of Colombia with the goal of helping to “solidify macroeconomic stability, boost development, encourage public/private partnership financing, strengthen regulation of the financial system [and] promote financial inclusion.” This is to include facilitating financing for small and medium-sized enterprises (SMEs), “raising transparency within the financial system and hastening the development of Colombia’s capital markets.” The loan carries a term of 20 years with interest based on the London Inter-bank Offered Rate (LIBOR).
Another goal of the funding is to buttress Colombia’s case for joining the Organization for Economic Co-operation and Development (OECD), a France-based intergovernmental organization. Established in 1961 with 35 member states, OECD seeks to support the development of policies boosting social and economic well-being via democracy and free market economics. It publishes approximately 250 research papers annually on these topics. As of December 2015, OECD reports total net assets of EUR 1.27 billion (USD 1.44 billion).
Established in 1959, IDB works with governments, companies and nongovernmental organizations (NGOs) to provide loans and grants to support small and medium-sized enterprise (SME), health, education, and other sectors. IDB also provides technical assistance and research in these areas. With 48 member countries, IDB has offices in Washington, DC; Japan; France; and all 26 of its member countries in Latin America and the Caribbean. As of March 2017, IDB reports total assets of USD 5.4 billion.
By Jacob O’Driscoll, Research Associate
Sources and Additional Information
Inter-American Development Bank Grants Colombia $450 Million USD Loan for Financial System Reforms
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