CAF will fund the SiGa guarantee system with a loan of up to $150 million
The instrument has been fundamental in supporting the financing of Uruguayan companies most affected by the COVID-19 crisis.
CAF-development bank of Latin America- approved a loan of up to US$ 150 million for the National Development Corporation (CND), which will be earmarked to strengthen the National SiGa Guarantee System.
The operation, completed within 12 years, will increase the capacity of the SiGa, which became particularly relevant during the health emergency as a fundamental instrument to support Uruguay's business and productivity system, by promoting and expanding access to financing for companies.
Thanks to this loan, SiGa will be able to expand its support capacity to guarantee bank system credits for micro, small, medium and large enterprises, in its quest to promote the normalization of the business cycle and sustain the payment chain during the crisis generated by the COVID-19 pandemic.
The funds will focus in particular on strengthening the operation of SiGa Emergency and SiGa Plus, aimed at those companies that have had their operations and financing possibilities affected in the context of the health emergency, and do not have necessary or sufficient guarantees to support their credit needs and ensure the continuity of their business.
The SiGa was created in 2009 as an instrument designed to guarantee Uruguayan SMEs access to credit with financial operators attached to the system, allowing for the lowering of rates that financial institutions charge customers.
Last year, the instrument – which is administered by CONAFIN Afisa, the CND's financial trustee – was adapted to the current context in agreement with the Ministry of Economy and Finance and the National Development Agency (ANDE), to meet the needs of companies most affected by the coronavirus crisis.
The new loan was approved by the CAF board in December 2020 and is in the formalization phase, which will allow the disbursement of funds in the coming weeks.
"Guarantee systems are a necessary and fundamental tool to sustain a country's business fabric, and more so when faced with a crisis situation like that generated by the pandemic. For CAF, it is a satisfaction to know that this funding will help thousands of productive units, which ultimately means work for Uruguayans, to remain operational and be able to weather the storm as best as possible," said François Borit, CAF's representative in Uruguay.
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