MIL-OSI Banking: The IDB approves US$500 million to support vulnerable populations in Bolivia

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Source: Inter-American Development Bank

The Inter-American Development Bank (IDB) approved a US$500 million loan for Bolivia that seeks to support the Government’s efforts to assist the most vulnerable populations affected by the COVID-19 pandemic, through the delivery of cash transfers.

The project will support the efforts of the Government of Bolivia to assist the most vulnerable populations to face the economic effects of the pandemic. To do this, it will finance the payment of part of the costs of the “Bono Contra el Hambre” (Bond Against Hunger), a cash transfer program created in response to the pandemic. It consists of a one-time transfer made to people who do not have a stable income, as they do not receive a salary from the public or private sector or a pension or long-term social security income. In turn, the project will finance part of the cash transfers of the Renta Dignidad (Dignified Income), a program in which people over 60 who do not receive retirement income participate.

The pandemic has generated a significant economic contraction in Bolivia. In 2020, the Gross Domestic Product (GDP) fell by 7.8%. In labor terms, the unemployment rate went from 4.3% during the third quarter of 2019 to 10.8% in the same period in 2020. The crisis particularly affected the income of the poorest and most vulnerable groups, who depend on their work activities, largely informal, to support their consumption. The project seeks to benefit around 458,000 people from the Renta Dignidad program and approximately 1.7 million people who received payments from the Bono Contra el Hambre.

The project is aligned with the priorities of the “Vision 2025”, an IDB Group roadmap that seeks to support the countries of the region to achieve an inclusive and sustainable recovery.

The $500 million loan has a two-year disbursement period, a ten-year grace period, and an interest rate based on LIBOR.

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