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House, Senate approves US$15 million to finance productive activities by small and medium enterprises

Posted: Thursday, October 28, 2021. 3:37 pm CST.

By Aaron Humes: The Development Finance Corporation (DFC) has been approved a loan to finance a project targeting micro, small and medium enterprises with COVID-19 relief, particularly those led by women and youth.

The DFC facility is for US$15 million with the Inter-American Development Bank (IDB) for 15 to 25 years with the usual interest rates, backed by a Government guarantee for the same amount.

In the Senate, Business Community Senator Kevin Herrera backed the motion, noting that commercial banks view the productive sector and MSMEs as “too risky to do business with” and so development financing from the DFC is important, for instance, for the success of a coconut product enterprise he learned about recently.

Non-Government Organization (NGO) and Opposition Senators Osmany Salas and Michael Peyrefitte both raised the issue of the size of businesses to benefit. By the definition of the Belize Trade and Development Institute (BELTRAIDE), a micro-business employs 2 to 4 persons including the owner; a small business between 5 and 20 persons and a medium-sized business, between 21 to 50 employees. The upper limit of the loan is a million Belize dollars which Salas argued takes away from the businesses that truly need it.

Also, Senators Salas and Peyrefitte question the need to sub-loan lines of credit to commercial banks and other similar banks rather than credit unions and the Corporation itself. Peyrefitte argued that the DFC had more of a “social conscience” and recognized the need to help business compared to the “cold” commercial bankers.

Minister of State for Finance Christopher Coye replied that the DFC “will do what is in its best interest and in the best interest of its customers.” He cited the recent $30 million capitalizations which helps put the Corporation in a position to try for these kinds of loans to support a sector that generates 70 percent of employment and income for the country.

 

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