Program for business development and MSME promotion in Central America

completed

The program takes a comprehensive approach to promoting micro, small and medium-sized enterprises (MSMEs) in Central America. The program's objectives are (1) to strengthen the entrepreneurial environment for MSMEs and in particular newly founded, young and/or innovative companies; and (2) to strengthen the financial sector to promote needs-based access to financial services for MSMEs and newly founded, young and/or innovative companies. The program's sponsor is the Central American Bank for Economic Integration (Banco Centroamericano de Integración Económica, BCIE). The program's target countries are Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. If the BCIE agrees to cooperate with suitable financial institutions in Panama during the implementation phase of the program, Panama could also be included as a target country. The total cost of the program is EUR 54.2 million. For the MSME loans, the BCIE has been provided with EUR 40 million (USD equivalent) as a low-interest loan from KfW funds. The BCIE has agreed to provide a further EUR 10 million (USD equivalent) in loan funds. The BCIE will channel the loan funds to the target group as MSME loans through its network of accredited financial institutions. For technical support of the programme, the European Union (EU) has provided EUR 3.8 million in grant funds from the Latin American Investment Facility (LAIF), for the implementation of which KfW has been given the mandate. In addition, the BCIE has budgeted up to EUR 400,000 for additional personnel costs and to cover other operational costs associated with the programme. All of the above components will be presented to the public by the BCIE as an integral Iniciativa DINAMICA.