The Central American Bank for Economic Integration (CABEI) met with representatives from the Nicaraguan private sector on May 5th, and offered them a wide range of financing programs, with amounts that could surpass US $400 million dollars. The meeting took place in the bank’s recently inaugurated site in Managua.
In addition to offering resources to member country governments, the CABEI provides funds for the region’s private enterprise. They justify this as a way to assure an adequate balance between the public and private sectors. At the same time, it serves to mitigate the financial risks implied in concentrating loans on very few clients, making them a very high percentage of their loan portfolio.
The bank’s offer included a US $200 million dollar fund that had formed part of a $350 million dollar package earmarked for “Facilitating Support to the Financial Sector”, so they could offer loans to small, medium and micro businesses. The bank had been unable to complete disbursement of the latter sum in Central America. Now that the final date to apply for the funds has passed, the credit entity had few objections to concentrating these resources in just Nicaragua.
The money can be used to finance technology, economic development, industry, Central American integration, job creation, gender programs, the environment, irrigation, projects in the dry corridor, electromobility, creating renewable energy sources, increasing the value of export products, or construction.
This possibility is of special interest to the Chamber of Nicaraguan Urban Developers, although they’re still awaiting for the disbursement of US $171 million dollars already approved by the CABEI. The latter fund is earmarked for construction and acquisition of some 18,660 houses under the National Program for the Construction of Socially Needed Housing. After applicants had complied with all the bureaucratic requirements, Dante Mossi, CABEI president announced he was allotting 12 extra months for the transfer of resources. The delay has exasperated the business group.
During Thursday’s meeting, representatives of the regional bank had two pieces of good news for the developers. First, that the loan funds for housing construction would be disbursed in the next few months, since, “the review of bidding requests has now been completed.”
The second piece of “good news” involved the creation of a mechanism to fund the businesses that are registered with the Chamber. The plan involves issuing bonds in cordobas [Nicaraguan currency] to be sold on the Nicaraguan stock exchange in order to create resources for the developers. The developers, in turn, can then promote the offer of homes, complemented by a large loan fund for buyers that the banks will manage.
It was unclear whether these bonds would be issued by the Nicaraguan Central Bank with CABEI’s guarantee, or directly issued by the Central American Bank. According to the CABEI website, Mossi stated “the possibility of issuing bonds in local currency to finance projects of the construction sector will be examined as an alternative to directly financing constructions.”
A member of the Chamber of Urban Developers, who was not present in the meeting with Mossi, stated that the business association was hopeful, because they’d received notice that they, too, could apply for the “Facilitated Support for the Financial Sector” in order to help the micro, small and medium businesses. Alternately, they may be able to negotiate directly with the Bank to obtain loans of up to US $20 million dollars.
Politics not discussed, but “the businesses should be careful who they partner with”
Several businessmen who participated in the meeting spoke anonymously with Confidencial. They called it “a very formal meeting, during which they [CABEI representatives] met first with us, and later with the bankers.”
“At no time did I see any of the business leaders that support the [Ortega-Murillo] government,” said one source, in reference to the government-alllied Association for Nicaraguan Development and Sustainablility.
The CABEI issued a press statement quoting president, Dante Mossi who said he had “conversed with thirteen representatives of chambers of commerce, eight financial institutions, the Association of Nicaraguan Banks, and the Chamber for Microfinancing regarding the financing mechanisms CABEI has at hand for the recovery and dynamization of the economy.”
A professional who was present at the meeting stated that the Ortega regime was represented by Nicaragua’s governor and assistant governor of the CABEI (Ivan Acosta and Ovidio Reyes, plus Bank Superintendent Luis Angel Montenegro.
“The CABEI was in charge of the meeting, and there was no reference to political issues,” stated a professional who was present at the meeting.
When asked about this high-level meeting, Attorney Eliseo Nuñez commented: “I don’t expect the big business leaders to be outspoken opponents of the government. Still, they should be clear about the partner they acquire when they speak with the government about anything.”
Nuñez, at one time a deputy with the Liberal party, urged the business community to recall that Ortega “had them as partners before 2018. Now he’s pursuing them again. He has them cornered, he’s charging them enormous amounts of money in taxes, and he’s imprisoned their principal leaders of then and now.”
“Because of that, I believe the business leaders are once more looking at things in a very nearsighted way. They don’t see beyond the profits they can obtain in the short term, when in reality, having any relation with Ortega has no strategic value,” Nuñez reasoned.
Finally, the CABEI promised to review the cost structure of their financing opportunities related to the creation of CABEIs capital funds, forecast to launch next June 30, “so that the final recipient receives the resources at a reasonable cost.” The regional bank also spoke of an opportunity to have access to South Korean funds for the creation of cutting-edge initiatives.
This article was originally published in Spanish in Confidencial and translated by Havana Times