Tegucigalpa, Honduras—The International Cooperation and Development Fund (TaiwanICDF) and the Central American Bank for Economic Integration (CABEI) today signed a Cooperation Agreement to initiate the second phase of the CABEI MSME Re-lending Fund, which will see the TaiwanICDF extend a further US$10 million in lending to CABEI as part of the ongoing operations of the Fund. Taking place at 16:00 local time, the signing ceremony was attended by Nick Rischbieth, Executive President of CABEI, and H.E. Lai Chien-chung, the Taiwanese ambassador to Honduras, who signed the cooperation agreement on behalf of the TaiwanICDF. Taiwan’s representative to CABEI on its Board of Directors, Kuo Li-chien, was also in attendance.

In addition to strengthening ongoing cooperation between Taiwan and CABEI, further TaiwanICDF lending to the CABEI MSME Re-lending Fund will deepen Taiwan’s contribution to development in Central America and allow CABEI to maintain its support for the region’s micro-, small- and medium-sized enterprise (MSME) sector. Although they play an important role in economic development throughout the region, Central American MSMEs are often constrained by a lack of access to credit and have difficulty in obtaining financing, which limits their growth. To date, the operations of the CABEI MSME Re-lending Fund have allowed qualified intermediary financial institutions (IFIs) to extend funding to Central American MSMEs, which has boosted the private sector development by stimulating economic activity and expanding employment. By providing an influx of capital to Taiwan’s developing partner countries in Central America, the additional US$10 million provided by the TaiwanICDF from today will allow IFIs to expand their own lending programs and fund supplementary technical assistance to strengthen their institutional capacity.

In the run up to today’s agreement, CABEI has been reassessing the operations of Central American MSMEs to evaluate the optimal financing structure required to meet market demand and address international development trends. In line with this reassessment, future on-lending from the Fund will give priority support to MSMEs operating in three key areas: agribusiness, energy efficiency and renewable energy.

Since Taiwan’s accession to CABEI as an extra-regional member in 1990, the TaiwanICDF has cooperated with the organization on a number of financial and technical assistance projects to spur development in the Central American private sector, including the CABEI MSME Re-lending Fund and the Regional Small and Medium Enterprise Re-lending Project. The TaiwanICDF has also provided assistance to Honduras and Nicaragua through the Special Fund for the Social Transformation of Central America, established the TaiwanICDF TVET Technical Assistance Fund to boost learning opportunities for low-income students and created the TaiwanICDF Fund for Consulting Services so that Taiwanese specialists can provide technical services during the initial appraisal phase of CABEI projects.

• Update: 2018/03/01
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