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Latino Daily News

Thursday May 5, 2011

Dominican Republic Set to Expand Lending to Corporate Sector

Dominican Republic Set to Expand Lending to Corporate Sector

Photo: Dominican Republic Businesses

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The Inter-American Development Bank (IDB) and Banco BHD of the Dominican Republic signed the contracts for $17.5 million financing facility that will strengthen Banco BHD’s capital to further expand its long-term lending to the corporate sector, including small and medium enterprises (SMEs). The facility consists of a seniorfive-year loan of up to $5 million and aneight-year subordinated loan of up to $12.5 million from the IDB’s Ordinary Capital.

The transaction will provide long-term financing to Banco BHD, which will in turn on-lend to corporate and SME clients – key market segments that drive sustainable economic development in the Dominican Republic. The subordinated loan will strengthen Banco BHD’s capitalization, further promoting lending activities as the loan will meet Tier II capital criteria according to the country’s banking regulator.

IDB President Luis Alberto Moreno and Banco BHD President Luis Molina Achecar signed the loan agreements in a ceremony held Wednesday at the IDB headquarters in Washington, DC.

This project is a strategic component of the beyondBanking program carried out by the Financial Markets Division of the IDB’s Structured and Corporate Finance Department. Through its program pillars, beyondBanking recognizes the catalytic role of banks in promoting economic growth and corporate change and in deepening capital markets. It seeks to contribute to the Bank of the Future – a banking business model that balances financial with social returns in order to foster an inclusive, environmentally friendly and transparent financial sector. This project is specifically aligned with the program’s accessBanking pillar, which targets financial deepening strategies for those traditionally under-served by the financial system.