IDB Invest Promotes Access to Financing for MSMEs in Belize
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).
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $16.3 billion in assets under management and 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Atlantic Bank
Atlantic Bank Limited (Atlantic Bank) opened its doors in Belize City on August 16, 1971. Although it started as a relatively small bank, as of today, it is one of the largest banks in Belize, and boasts the largest loan portfolio in the country. Over the years, Atlantic Bank has focused on establishing strategic partnerships toward the development of the Belizean economy. Atlantic Bank recognized the importance of the MSME sector to the Belizean economy and has made a strategic decision to allocate resources to the development and expansion of the sector. The Bank’s products and services have been tailored to meet the needs of the MSME sector. Atlantic Bank was the first to introduce a state-of-the-art real-time electronic payment platform to support the development of the Tourism and MSME sectors and address their real needs.