FUNDING A SOCIAL TRANSFORMATION

CABEI’s micro credit program provides small loans to help individuals and local firms develop new business

CABEI’s portfolio is extremely diverse supporting a wide range of productive areas and social initiatives. Its position is distinctive from other multilateral lenders in that the private sector makes up more than a third of its overall loans book.

The bank’s portfolio includes loans to several high-profile infrastructure developments spanning water, energy, transport, and telecommunications. The aim is to equip the region’s ports, airports and other facilities with the necessary hardware to handle the anticipated growth. It is also boosting national industries such as clothing production in Honduras and Costa Rica’s electronics manufacturing. With backing from CABEI, Honduras’ apparel industry exports have soared to over $2.5bn.

CABEI has made it a point to strengthen its Special Fund for Social Transformation with the aim of improving the lives of ordinary people in Central America. Priority sectors for social funding include health, education, housing, small enterprise and sustainable rural development.

One major social initiative is the Plan Puebla Panama, a cross-border economic development program designed to improve living conditions from the southern states of Mexico down to Panama’s border with Colombia. CABEI has pledged $608m to the scheme.

Other important social programs include a micro-credit program to provide small loans, as low as $100, to individuals and local industries to foster productive activity, especially in rural, under-developed areas, and protect people from loan sharks. Micro, small and medium enterprise loans already make up close to 10% of CABEI’s total financing. There are other initiatives to help more low-paid people purchase their own home.