IDB Invest provided a senior loan of up to $30 million to Atlantic Bank Limited to help increase access to financing for micro, small and medium enterprises (MSMEs) in Belize. The financing consists of two tranches: a committed loan of up to $20 million and an uncommitted loan of up to $10 million, each having a 3-year tenor.
IDB Invest’s loan will boost the growth of Atlantic Bank’s MSMEs portfolio in Belize through access to stable, medium-term financing. The loan will be complemented by advisory services to assist Atlantic Bank to further strengthen its strategy for the MSME segment, including a differentiated and effective approach to the women-led MSME (WMSME) portfolio.
IDB Invest’s financing will allow Atlantic Bank to reach historically unbanked, underserved populations in Belize. The scope of the advisory will include assessing and enhancing asset-based lending, taxonomy, portfolio segmentation, and value proposition, as well as identifying new areas of opportunity within the MSME segment. Additionally, the advisory will help Atlantic Bank to develop an Environmental and Social Management System to analyze, manage and monitor related environmental, social, and labor risks.
Belize is the smallest country in Central America, by number of inhabitants and size of the economy. Its GDP growth in the last years has largely rebounded to pre-pandemic levels. Belize’s financial system is adequately capitalized and benefits from a relatively liquid balance sheet, properly positioned to capitalize on a gradually improving macroeconomic scenario. Yet, there are structural factors that make operating in the country challenging.
Belize’s private sector consists primarily of MSMEs, 72% operating in the services sector. These companies generate more than 70% of national employment and are the main source of consumption. Yet, MSMEs face significant challenges in terms of access to financing. This situation combined with Belize’s financial system challenges makes it more difficult for lenders to originate new loans to smaller borrowers with a limited transactional record.
Difficulties to access credit are also accentuated for certain population groups, such as women. Women face additional financial and non-financial barriers to access credit, such as the lack of guarantees, existing social and cultural norms, and the tendency of companies owned by women to be smaller in size. In Belize, 55% of microenterprises and 32% of small and medium enterprises are women owned.
This project is expected to contribute to two United Nations Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), and Industry, Innovation & Infrastructure (SDG 9).
