SOURCE: Buffalo Business First
A new program is being launched to encourage U.S. banks and commercial lenders to lend to businesses in Latin America. The U.S. Treasury Secretary Henry Paulson Jr. announced the program as a way to show support for neighboring countries and strengthen the region economically.
Latin American businesses suffer from difficulties in securing forms of financing and funding. Only 10% of businesses in Latin America currently have access to loans and funding through banks and commercial lenders. There are many businesses in Latin America that lack the collateral usually required to qualify for loans. Many of Latin America’s small businesses lack financial statements and collaterals that in the eyes of U.S. banks and commercial lenders makes lending to them a risky proposition.
The program is working with Multilateral Investment Fund of the Inter-American Development Bank to develop a $50 million program to bring much needed money for loans to Latin American businesses. The Overseas Private Investment Corporation is making loan guarantees, including guarantees on local currency.
“The U.S. acts in our own and, we believe, the region’s best interest when we help neighboring nations build open economies and create opportunity for all their people,” said U.S. Treasury Secretary Henry Paulson Jr.
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