The Inter-American Development Bank (IDB), a US-based multilateral financial institution, has approved a USD 10 million, ten-year loan to Banco de Finanzas (BDF), a commercial bank in Nicaragua, to fund a pilot housing project in Nicaragua. The project will aim to improve access to mortgage financing for low-income families working in the informal sector by implementing a rent-to-own program in which potential homeowners rent property for a 24-month period. Part of the monthly rental fee will go into a savings account, which clients can draw on to make a down payment on the home. The completion of rental payments will also assist clients in establishing a credit record. The pilot program is being funded by IDB’s Opportunities for the Majority (OMJ) initiative, which aims to finance market-based business models in partnership with companies, governments and communities to develop products and services that improve the lives of citizens. The project estimates extending mortgage loans to approximately 500 Nicaraguan families.
BDF reported total assets of USD 112 billion as of 2011. For the same year, IDB reported total assets of USD 89 billion.
By Charlotte Newman, Research Associate
About Inter-American Development Bank
The Inter-American Development Bank (IDB) is a US-based multilateral finance institution that was established in 1959 and operates in Latin America and the Caribbean. IDB works with governments, companies and nongovernmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health, education and other sectors. IDB also provides technical assistance and research in these areas. Its Board of Executives is elected by 48 member countries, 26 of which are located in Latin America and the Caribbean. As of 2011, IDB reported total assets of USD 89 billion. The IDB is headquartered in Washington, DC, with offices also in Japan, France and all 26 member countries in Latin America and the Caribbean.
Sources and Additional Resources:
Inter-American Development Bank: Press Release: “IDB Supports Innovative Rent-to-Own Pilot Housing Program in Nicaragua,” http://www.iadb.org/en/news/news-releases/2012-05-17/rent-to-own-pilot-housing-program-in-nicaragua,9986.html?WT.mc_id=NewsEmail_Long_9986&wtSrc=Email&wtType=Long&wtArticleID=9986
MicroCapital.org story, February 13, 2012, “MICROCAPITAL BRIEF: Center for Latin American Monetary Studies (CEMLA), Multilateral Investment Fund (MIF), World Bank Launch Envia Centro America to Promote Transparency in Remittance Activity,” https://www.microcapital.org/microcapital-brief-center-for-latin-american-monetary-studies-cemla-multilateral-investment-fund-mif-world-bank-launch-envia-centro-america-to-promote-transparency-in-remittance-activity-2/
MicroCapital.org story, December 6, 2011, “MICROCAPITAL BRIEF: Working Capital for Community Needs (WCCN) Loans $1.2m to Microfinance Operations of Pro Mujer in Nicaragua, Peru,” https://www.microcapital.org/microcapital-brief-working-capital-for-community-needs-wccn-loans-1-2m-to-microfinance-operations-of-pro-mujer-in-nicaragua-peru/
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