OPEC Fund unites with Banco Ficohsa to offer $25mn worth loan for Honduran SMEs

By Shilpa Annie Joseph, Official Reporter
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OPEC Fund to provide loan to Banco Continental
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Austria-based intergovernmental development finance institution, OPEC Fund for International Development (OFID) has signed a $25 million worth loan with Honduras’ Banco Ficohsa for on-lending to Small and Medium-Sized Enterprises (SMEs) affected by disruptions caused by the COVID-19 pandemic and two hurricanes.

According to the reports, Banco Ficohsa will use the OPEC Fund’s term loan to on-lend to SMEs in industries, such as agriculture, manufacturing, and textiles. This financing is well-aligned with the United Nations Sustainable Development Goal 8, decent work and economic growth.

This is the fourth loan the OPEC Fund has extended to Banco Ficohsa. Earlier proceeds were used to grant around 134 sub-loans to SMEs in the agricultural, manufacturing, and textiles sectors, as well as to increase the Bank’s capital basis.

Dr. Abdulhamid Alkhalifa
Dr. Abdulhamid Alkhalifa
Director General

“Supporting small businesses is key for economic stability and for job creation. We are pleased to have the opportunity to support Honduran SMEs to have access to finance and provide funding through the local banking system that they need to recover from the unprecedented impact of the pandemic and hurricanes. Banco Ficohsa is in a strong position to expand the reach of this loan and ensure financial sustainability of SMEs in critical sectors.”

Honduras and the OFID have been development partners for 45 years. To date, the OPEC Fund has given funding for both government and private sector initiatives, as well as trade finance operations. The OPEC Fund’s efforts, which were aligned with Honduras’ development plans and priorities, concentrated on the energy, agriculture, transportation, financial (SMEs), water, and sanitation sectors, among others.

OFID was established in 1976 by the then 13 member countries of OPEC, including the UAE. It is the development finance institution established as a channel of aid to developing countries.

Related: OPEC fund loans $10mn to Bank of Maldives to aid SMEs in tourism