Panama agrees another US$150 million with IDB for MSMEs

RIO DE JANEIRO, BRAZIL – Panama’s Ministry of Economy and Finance (MEF) subscribed this Monday a loan with the Inter-American Development Bank (IDB) for US$150 million to reactivate micro, small and medium-sized enterprises (MSMEs) hit by the economic crisis of covid-19.

This loan corresponds to the second part of the “Global Credit Program to Promote the Sustainability and Economic Recovery of Panama”, of which already in June 2020, the multilateral entity endorsed the first operation for 150 million as the first tranche of a credit of 300 million for MSMEs and other sectors of the country.

“With the signing of the second credit contract, the procedures to make effective the remaining 50% are underway,” said a statement from the Ministry of Economy.

The contract was signed by the Minister of Economy, Héctor Alexander, and the IDB representative in Panama, Rocío Medina. It will help more than 1,600 MSMEs from different productive sectors of the country.

The purpose of this loan is to “contribute to the economic recovery of MSMEs affected by the crisis generated by the COVID-19 pandemic, through access to financing to meet their short and medium-term business needs,” the press release notes.

“We are very pleased to have signed this contract that will benefit more than 1,600 MSMEs in the country’s productive sectors, such as agriculture and livestock,” said the IDB representative.

According to official information, the loan is part of the economic reactivation strategy of the Government of Panama, which also supports MSMEs.

In addition, the MEF said that it would also support the needs of productive reconversions and adaptations in the framework of the digital transformation process, attention will be paid to a timely increase in demand focusing on specific areas such as trade, services, and industry.

Medina pointed out that MSMEs represent 70 % of the productive sector and more than 90 % of employment.

Throughout the pandemic, Panama has negotiated millionaire loans with multilateral organizations such as the International Monetary Fund (IMF) or the Inter-American Development Bank (IDB) to face the consequences of covid-19.