MIF approves US$5mn loan for tech projects

The Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) has approved a US$5mn loan for Chile to finance development of technology-based enterprises and to help small and medium-sized exporters capitalize on trade agreements, the MIF said in a statement. The MIF will provide a US$3mn loan and a $530,000 grant for technical assistance to help establish a seed capital facility for the development of technology-based enterprises. Chilean development organization Fundación Chile and other business support organizations will administrate the project, which involves the creation of a network of institutions to offer support and help identify opportunities, a network of angel investors and the initial seed capital facility. Angel investors are long-standing businessmen with significant resources to invest, high predisposition to risk and a willingness to play an active role in the development of the startup companies they invest in. Fundación Chile and private investors will also provide financing similar to the MIF loan. MIF funds will finance loans to new enterprises, while counterpart funds will be invested in the enterprises' capital stock. The seed capital facility will have a lifetime of 8-10 years to allow gradual repayment. The remaining US$2,075,000 pledged by the MIF is a grant to Chile's export promotion bureau ProChile, which is working on a project with the Santiago chamber of commerce CCS. This project will provide assistance to 250-300 SMEs to start or increase exports and achieve sustained growth in countries with which Chile has signed trade agreements.