Faced with the unexpected situation of the coronavirus pandemic (COVID-19), the economic activity of Honduras has been impacted by the measures established by the government in an attempt to reduce the mobility and spread of the virus. Similarly, President Juan Orlando Hernandez called on international financial organizations to provide financial assistance to Honduras to help ensure that the COVID-19 pandemic does not strictly affect the country’s economy.
In response to the President’s call, the Central American Bank for Economic Integration (BCIE) has approved a series of programs to provide financial resources to Honduras to help it deal with the pandemic. Among the most relevant approved programs is a line of credit signed between BCIE and the Central Bank of Honduras (BCH) for USD 200 million. This program was created with the main objective of strengthening the position and capacity of the BCH to manage liquidity in the context of the health emergency caused by the pandemic.
On the other hand, with the purpose of maintaining employment conditions and economic reactivation, BCIE approved a financing of USD 300 million for the “Program for Economic Reactivation through Micro, Small and Medium-sized Enterprises (MSMEs) in the Crisis and Post-Crisis COVID-19 in Honduras”. The program was created to provide financial resources to MSMEs, since they are the backbone of the country’s economy, generating 70% of the jobs in the country.
Additionally, BCIE approved USD 50 million to increase efforts to prevent, detect and treat COVID-19, as well as to mitigate its economic impact on the country in order to contribute to macroeconomic stability and boost the country’s economic recovery.
In short, BCIE, as the financial arm of Central American integration and development, aims to support Honduras during the crisis it is facing due to the COVID-19 pandemic by authorizing support programs aimed at economic reactivation.
Managing Partner
García & Bodán
Honduras
*This article was written with the help of Ma. Fernanda Arévalo, Law Clerk.