Given the current socioeconomic and financial circumstances, the increase in unemployment and informality, it is necessary for the economic reactivation to be swift and effective.
The Panamanian state has created various tools to influence economic growth in different areas and in this article we will address a current success story that is yielding visible results. This is the case of the Microcredit Trust Fund in Panama (Fidemicro-Panama).
The Fidemicro program, which was established by Law 72 of 2009, is a fund that functions as a second-tier bank. The State contributes funds to a trust and those funds in trust are managed independently by a trustee entity chosen through a public bidding process, in this case Icaza Trust Corporation (I.T.C.). The trustee, on behalf of the trust, grants loans in a transparent manner and with high administrative standards and risk analysis, to financial institutions throughout the country, so that they have liquidity to be able to place loans to the various micro, small and medium-sized enterprises (MSMEs) and entrepreneurs in the country.
This Trust Fund performs the function of second-tier banking by providing financial resources to first-tier operators, who with such resources and at their own risk, shall make placements and recoveries from their users and clients, expanding and consolidating their microfinance services at interest rates that must be competitive.
It should be noted that lending money to MSMEs is an essential pillar for the development of the Panamanian economy. However, in general, traditional banks do not cover them, for reasons such as profitability, lack of resources, or low risk tolerance or appetite. After analyzing some statistics, we have realized that the appetite for credit in this sector is important and promising.
Likewise, in order to achieve sustained and less unequal growth, Panama needs to encourage its population to create companies and businesses that generate value and jobs. This objective can be achieved more productively with financing focused on the small business ecosystem.
Since its inception, the Fidemicro-Panama trust has placed resources to more than sixteen (16) financial companies, one (1) bank, one (1) rural savings bank and six (6) cooperatives.