MICROCAPITAL BRIEF: Paraguay Borrows $15m from IDB, Seeking to Boost Productivity Among 8,500 MSMEs

The Inter-American Development Bank (IDB), whose membership comprises 48 nations, recently issued a 24-year loan of USD 15 million to the government of Paraguay with the goal of increasing the productivity of 8,500 micro-, small and medium-sized enterprises (MSMEs). Paraguay plans to use the funds for technology innovation and a national network of “productivity centers” providing business development training and technical assistance. In addition, the government will seek to assist MSMEs “through the creation or reformulation of regulatory frameworks; the implementation of an observatory to monitor and analyze the sector; [building a] gender- and environmental-indicators monitoring system; and the training of people in policies and business development.”

IDB issues grants, loans and technical support intended to promote economic development – including via improved health, education and infrastructure – in its member countries in Latin America and the Caribbean. As of December 2019, IDB reported total assets of USD 136 billion, having issued USD 13 billion in loans and guarantees during the year.

IDB is a member of the IDB Group, whose other members are the Inter-American Investment Corporation, which uses the trade name IDB Invest, and the Multilateral Investment Fund, which uses the trade name IDB Lab. IDB Lab is an “innovation lab” that tests models for facilitating “inclusive growth.” IDB Invest focuses on promoting economic development in Latin America and the Caribbean through projects in agriculture, financial inclusion, sustainable energy and transportation. As of June 2020, it had USD 13.1 billion in assets under management, deployed via 385 clients in 25 countries.

By Romil Pandey, Research Associate

Sources and Additional Resources

IDB press release
https://www.iadb.org/en/news/paraguay-increase-productivity-msmes-idb-support

IDB annual report for 2019
http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=EZSHARE-1177496895-273

IDB Invest financial statements
https://idbinvest.org/en/investors

Past MicroCapital Brief on IDB
https://www.microcapital.org/microcapital-brief-banco-w-issuing-40m-social-bond-funded-by-idb-to-promote-gender-equity-in-colombia-via-microfinance/

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