In order to reinforce a struggling export sector, Colombia’s government is creating a $175 million direct credit line for companies engaged in “producing, marketing or promoting goods and services allocated for export.”
The credit line will be managed by development bank Bancoldex and the Ministry of Trade, where funds will be primarily geared towards the “purchase of raw materials, supplies, inventories and other operating expenses; the purchase or leasing of warehouses, machinery and equipment, or vehicles; and adjustments or improvements of facilities and shops,” said Bancoldex president, Luis Fernando Castro.
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Castro went on to describe how the distribution of these funds to a variety of Colombian export companies should serve to “increase productivity, bring about modernization and promote a competitive sector.”
Loans will be categorized into working capital investment and modernization loans, which will have two and three year terms, respectively. Credit may also be used for the consolidation or replacement of company liabilities.
Bancoldex will also be creating a $50 million credit line to help hedge exchange rate risks for companies that receive payment in US dollars.
“For a Colombian company that receives payment from their foreign sales in dollars, acquiring a loan in that currency would allow it to have what is called a natural hedge, because the money received and paid are in the same currency, reducing or mitigating currency risk, “said Castro.
This ex-change rate fund will give Colombian exporters lower borrowing costs relative to borrowing directly in Colombian pesos, helping them compete more efficiently on a global scale.
Sources
- Recursos de Bancóldex en pesos y en dólares para el sector exportador (Bancoldex)
- Colombia invierte $350.000 millones en el sector exportador (El Espectador)
