IDB Invest and Panama support tourism with a financing guarantee program

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https://en.travel2latam.com/nota/75192-idb-invest-and-panama-support-tourism-with-a-financing-guarantee-program
IDB Invest and Panama support tourism with a financing guarantee program
Source: ATP
July 04, 2022

This initiative is aligned with the Sustainable Tourism Master Plan 2020-2025


To facilitate and promote tourism, IDB Invest, in close collaboration with the Government of Panama, has created a risk mitigation facility to guarantee loan portfolios in the tourism sector, which includes the SME business segment.

The objective is to support the tourism sector by offering financial institutions a guarantee program to offer loans to the tourism sector, which will help the recovery of the industry in Panama.

This initiative is aligned with the Master Plan for Sustainable Tourism 2020-2025, currently executed by the Panama Tourism Authority (ATP), through which the Panamanian government works on alternatives to support the search for financing for small and medium-sized tourism companies. for the revival of the industry.

Likewise, it complements the efforts of the public-private sector and Promtur Panama, through the Tourist Demand Reactivation Commission, to attract the arrival of tourists, which is what can most help companies recover in the short and medium term. .

Several agreements have recently been reached to boost demand, among which a promotion agreement with the Travel Leaders Network (TLN), the world's largest network of travel agencies, can be highlighted, with which it seeks to attract some 17,000 travelers from the United States and Canada; and, likewise, through the Economic Reactivation Commission of the private sector, an agreement was reached with the wholesale agency OnVacation to achieve the arrival in the country, in one year, of some 6,000 tourists from Colombia.

In 2019, before being hit by the pandemic, the travel and tourism industry accounted for 15.6% of the country's gross domestic product, according to the World Travel and Tourism Council.

Tourism loan portfolios will be originated and serviced individually by each participating financial institution in Panama. Banistmo, a subsidiary of Grupo Bancolombia and the second largest private bank in Panama, will be the lead institution and the first signatory of the line of credit with a guarantee of up to US$80 million.

Banistmo's tourism portfolio will benefit from this joint guarantee, allowing the bank to support the recovery of its existing tourism clients and provide new access to capital. The agreement complements Banistmo's efforts to stabilize and grow its tourism portfolio, to reach almost US$200 million by 2025 and increase the number of loans to the sector, from 218 before the pandemic to approximately 290 by 2025.

As a pioneer in Panama and the region, the joint line of credit between IDB Invest and the Government of Panama will guarantee a tourism loan portfolio of up to US$300 million through different financial institutions in Panama.

 IDB Invest anticipates engaging with other partner banks to better assess their tourism portfolios and provide them with the required guarantees, along with the Panamanian government, to encourage additional investment and growth in tourism.

It will also provide advisory services to Banistmo to help strengthen its offer to small and medium-sized enterprises (SMEs) within the tourism sector, so that these companies can obtain broader access to credit products.

This agreement is expected to contribute to the United Nations Sustainable Development Goal of Decent Work and Economic Growth (SDG 8). It also promotes the 2025 Vision of the IDB Group, which aims to achieve recovery and sustainable and inclusive growth in Latin America and the Caribbean. Likewise, it is aligned with the Country Strategy with Panama of the IDB Group for 2021-2024, which considers the growth of tourism as a strategic objective for the recovery and diversification of the country's economy.

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