CONTEXT

There are many barriers faced by the financial institutions to lend credit to small and medium-sized enterprises (SMEs) projects in Panama. Some of the barriers include a lack of visibility on the business opportunity. Financial institutions are not used to mobilise demand (convince clients to invest in specific solutions); they are used to finance clients that approach them. Another barrier is the fact that financial institutions evaluate the company (the borrower) that is requesting the funding and not the project.

Inter-American Development Bank (IDB) Invest granted financing directed towards St. Georges Bank & Company (St. Georges), to support their portfolio growth of credit for Small and Medium-sized Enterprises (SMEs). During the structuring process, St. Georges has expressed its interest in creating its corporate policy and sustainability strategy, as well as simplifying its SME credit analysis and approval processes, thereby supporting the credit growth strategy towards the SME segment. They also aim to specialise its offer of financial products and services to its various clients, identifying green financing opportunities, as well as strengthening the analysis of social, climatic and environmental risk in segments where it is critical to mitigating risks. And finally, they are also seeking to enhance the capacities of St. Georges officials on the aforementioned issues.

PROJECT

The general objective of this project is to support St. Georges in the design and implementation of processes and tools to simplify and streamline SME credit approval processes, as well as the identification and appropriate management of green investments in that segment.

BASE will support St. Georges bank with the following activities

• Designing and implementing simplified SME credit analysis and approval processes in St. Georges;
• Developing a Sustainability Policy and a Corporate Sustainability Plan that sets out the general vision, the long-term objectives and the actions that must be carried out in the medium and short term to establish a solid base that allows the development of business initiatives green for the future, in line with the principles of green loans;
• Designing identification processes for green investments in SMEs in the priority business segments they serve, aligned with the business plan and its market strategy;
• Studying the existing policies and processes to provide support to St. Georges to improve the identification and management of social, environmental and climatic risks relevant to the sectors in which the final client SMEs operate;
• Training managers and executives on green business opportunities in the SME segment, as well as social, climatic and environmental risks relevant to the SME sectors in which they seek to grow the portfolio.