The OPEC Fund for International Development or OFID has signed a term loan agreement for $30 million with Banco Regional of Paraguay, said local reports on Wednesday, October 13.
The South American country’s agri-focused bank will on-lend from this corpus to small and medium-sized enterprises or SMEs, particularly agribusinesses, said the local reports.
The loans are aimed at SMEs severely disrupted by economic slowdowns as a result of the Covid-19 pandemic.
Agribusiness is a key economic driver of Paraguay’s economy, and food exports are the main source of the country’s foreign currency.
The sector is composed primarily of agro-related SMEs, generating over 80 percent of employment.
According to a statement issued by OFID, the loan is expected to help Banco Regional address SMEs’ needs for liquidity caused by business interruption in connection to the partial Covid-19 lockdown.
Speaking about the impact of this loan, OPEC Fund Director-General Abdulhamid Alkhalifa said, “This will help to increase Paraguay’s links to global value chains, support exporting SMEs, and protect employment in related industries.”
This is the third facility the OPEC Fund has extended to Banco Regional.
Proceeds from the first loan were used to on-lend to 36 sub-borrowers in the agriculture sector.
The second facility provided 53 sub-loans to Paraguayan enterprises for international trade finance purposes, pre-export finance of cash crops and import of agricultural supplies and machinery.
The OPEC Fund has supported Paraguay’s development focused goals for over 40 years and financed projects in sectors including the financial, transportation, energy and agriculture through its public, private and trade finance, and grants operations.