IDB Provides $17.5M Financing to Dominican Republic Bank

The facility consists of a senior five-year loan of up to $5 million and an eight-year subordinated loan of up to $12.5 million from the IDB’s ordinary capital.

 

The transaction will provide long-term financing to Banco BHD, which will in turn on-lend to corporate and SME clients – key market segments that drive sustainable economic development in the Dominican Republic. The subordinated loan will strengthen Banco BHD’s capitalization, further promoting lending activities as the loan will meet Tier II capital criteria according to the country’s banking regulator.

 

 

IDB president Luis Alberto Moreno and Banco BHD president Luis Molina Achecar signed the loan agreements in a ceremony held on Wednesday at the IDB headquarters in Washington, DC.

At the signing, Moreno reiterated the IDB’s support for initiatives that strengthen the private sector, especially in smaller economies such as the Dominican Republic. “With this facility, we will support the economic growth of the SME sector in the Dominican Republic through Banco BHD, while at the same time strengthening the bank’s capitalization, which will have a multiplier effect in its ability to provide long-term financing in the country.”

 

 


Molina Achecar commented: “Signing this agreement gives us great satisfaction because it not only affirms that the Inter-American Development Bank has confidence in Banco BHD, a business relationship of which we are very proud, but it also reaffirms our commitment to well-functioning corporate governance, respect for the environment and a pursuit of best practices in the region.”

 

 

This project is a strategic component of the beyondBanking program carried out by the Financial Markets Division of the IDB’s Structured and Corporate Finance Department. Through its program pillars, beyondBanking recognizes the catalytic role of banks in promoting economic growth and corporate change and in deepening capital markets. 

It seeks to contribute to the Bank of the Future – a banking business model that balances financial with social returns in order to foster an inclusive, environmentally friendly and transparent financial sector.

 

 

This project is specifically aligned with the program’s accessBanking pillar, which targets financial deepening strategies for those traditionally under-served by the financial system.

 

 

(Major portions of this article were incorporated from a Caribbeannewsnow report) 

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