IDB grants US$20mn for partial guarantee program

The IDB has granted US$20mn to the Haitian government to establish a partial credit guarantee fund to facilitate the restructuring of loans to businesses affected by the devastating 7.0-magnitude earthquake that struck the country on January 12, a press release from the multilateral reads. The program will allow banks and credit unions to restructure loans and provide additional financing to viable companies that were most affected by the earthquake and are now facing difficulties in servicing their current loans. Under the program, to be run by the industrial development fund (IDF) of central bank Banque de la Republique d'Haiti, commercial lenders will request partial credit guarantees from the IDF for eligible restructured loans, and will initially focus on loans under US$1mn, to facilitate the financial restructuring of SMEs. By aiding in the restructuring of such loans, the Haitian central bank will prevent more borrowers from going into liquidation, reduce capital losses for lenders and assist the country's economic recovery, IDB said.