The Brazilian government’s Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and the multilateral Inter-American Development Bank (IDB) recently agreed to invest USD 900 million in micro-, small and medium-sized enterprises (MSMEs) in nine states of the Amazon region. Of the total funding, which is to be lent via local financial services providers, USD 750 million is sourced from IDB.
The loans are intended to allow MSMEs to perform “modernization, expansion, goods and equipment acquisition, and innovation… [and] will include incentives to adopt sustainable practices….” Among the goals of the program are to “expand the use of new and sustainable technologies, boosting the emergence of innovative value chains and contributing to greater regional economic dynamism.”
The participation of IDB is part of that institution’s Amazonia Forever program, an effort to strengthen financing efforts, project execution and partnerships that improve the health of farms, forests and cities in the region.
BNDES is a development finance institution that was founded in 1952 and invests in “innovation, local development and socio-environmental development.” During 2022, the organization disbursed investments totaling BRL 19 billion (USD 3.9 billion).
IDB is headquartered in the US city of Washington and provides “financial and technical support for countries working to reduce poverty and inequality.” As of 2022, the institution reported total assets of USD 148 billion.
IDB is a member of the IDB Group, which is active in Latin America and the Caribbean. In addition to IDB, the group comprises IDB Invest, which aims to promote economic development and financial inclusion through private-sector investment, and the IDB Lab, which tests models for facilitating growth inclusive of “vulnerable people affected by economic, social or environmental factors.” IDB Group has 48 member countries, including 26 in Latin America and the Caribbean.
By Tiyasha Sarkar, Research Associate
Sources and Additional Resources
IDB press release
https://www.iadb.org/en/news/idb-and-brazilian-development-bank-commit-investing-900-million-small-business-amazon
BNDES homepage
https://www.bndes.gov.br
IDB description of Amazonia Forever
https://www.iadb.org/en/who-we-are/topics/Amazonia
IDB homepage
https://www.iadb.org
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