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IFC FACILITATES FINANCING FOR SMALLER BUSINESSES IN CENTRAL AMERICA


Jannette Esguerra
Phone: (202) 458-5204
Fax: (202) 974-4384
E-mail: jesguerra@ifc.org


MANAGUA, NICARAGUA, October 16, 1998 --- The International Finance Corporation is supporting the private sector in six countries of Central America through a credit facility to BAC International Bank that will be used to provide scarce, long-term financing to small- and medium-sized businesses.

IFC today signed the first tranche of a US$30 million credit facility for BAC.  The project consists of three $10 million tranches with a maturity of 10 years that will be used to finance projects in Nicaragua, Costa Rica, El Salvador, Guatemala, Honduras and Panama. The first tranche will be directed to Nicaragua and Honduras where long-term financing is most needed.


The corporate sector in Central America, which consists largely of smaller businesses that can be strong generators of jobs, faces substantial lags in modernization, product quality and production efficiency. The project will provide term financing to help those businesses improve competitiveness and promote private sector-led growth and employment in the region.


BAC is one of the few financial institutions with a well-defined strategy for Central America and a presence and track record in the region. Two of BAC’s subsidiaries -- Banco de America Central, S.A. in Nicaragua and Banco Credomatic, S.A. in Honduras -- will undertake lending under the first tranche.


The agreement was signed today by Mr. Carlos Pellas, Chairman of BAC International Corp., and by the Manager of the Latin America Financial Markets Division of IFC, Ms. Haydee Celaya, who said the package demonstrates IFC’s strong support for the region and its ability to build a modern, thriving private sector.


IFC, part of the World Bank Group,  fosters economic growth  in developing countries by financing investments, mobilizing capital in the international financial markets and providing technical assistance and advice to governments and businesses.