Grants and loans
The IDB provides trade-related financial assistance to Latin American and Caribbean countries in the form of grants and loans to both the public and private sectors.
The Vice Presidency for Private Sector and Non-Sovereign Guaranteed Operations (VPP) coordinates the development and delivery of private sector and non-sovereign guaranteed operational programs of the IDB Group (composed of the IDB, the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund (MIF)).
The Structured and Corporate Finance Department (SCF) of the IDB provides loans from the IDB’s own resources (“A” Loans) and works with banks and institutional investors to participate on a co-financing basis with the IDB through the sale of loan participations, or “B Loans”. SCF also provides partial credit and political risk guarantees and can work with clients to mobilize non-reimbursable resources for project preparation.
SCF’s trade finance work falls under its access2Trade product lines, aimed at strengthening the supply of trade finance and trade-related infrastructure in Latin America and the Caribbean (LAC). Access2Trade includes the following financial products and services: (1) trade finance guarantees, loans and co-financing facilities as part of the Trade Finance Facilitation Program (TFFP); (2) IDB-financed trade funds; (3) specialized trade finance technical assistance and knowledge products.
Operational since 2005, the TFFP offers credit guarantees to confirming banks to cover the risk they take on eligible trade financing instruments issued by LAC issuing banks. The TFFP also offers direct loans to the issuing banks in the region to finance their trade portfolios. Through the TFFP, the IDB strengthens bank capacity in the region and thus, direct funding opportunities for LAC importers and exporters.
Apart from the TFFP, a program conceived to support LAC importing and exporting companies through their banks, SCF’s efforts to support LAC’s trade have also materialized through its participation in trade finance funds, which enable IDB to reach out directly to these importing and exporting companies from the fund’s platform. Funds offer a combination of equity from a third-party trade finance facility coupled with IDB’s A/B loans. These uniquely structured funds respond to market demand and fill a critical void in local banking sectors. IDB’s engagement leads to a multiplier effect stimulating the production, movement and consumption of more goods and services across a range of countries and industries.
On the technical assistance and knowledge products arena, SCF also offers on-line and classroom trainings to financial intermediaries and their importer and exporter clients, so that all parties understand the value of trade finance products and how to access them.
For more information see: http://www.iadb.org/scf
Private sector development
The mission of the IDB Investment Corporation is to promote and support the development of the private sector and the capital markets in its Latin American and Caribbean member countries by investing, lending, innovating, and leveraging resources as the institution charged with fostering the development of small and medium-sized enterprises to further sustainable economic development. FINPYME® is a diagnostic methodology developed by the Inter-American Investment Corporation to assess small and medium-sized enterprises in order to help them become more competitive and improve their access to potential sources of financing.