DEG mobilises USD 80 million for small and medium-sized enterprises in Honduras

Honduras is one of Central America's fastest-growing economies. Last year, partly owing to the pandemic, the country's gross domestic product grew by 12.5% – almost twice the regional average. Honduras still has one of the lowest income levels in the region however and a GDP per capita of only 2,831 USD (2021). Investments are therefore essential to ensure sustainable economic development. DEG is now offering financing to help with this shortfall: We are arranging a subordinated loan totalling USD 80 million for Banco Atlántida.

Additional international partners are Norfund, the eco.business Fund, European Financing Partners (EFP) and the EB Sustainable Funds Luxembourg. As lead investor DEG is providing USD 29 million of the investment. The financing is part of Banco Atlántida's growth plans and is intended to cover the bank's growing capital requirements as well as to enable further investments in the national economy. In particular, small and medium-sized enterprises (SMEs) will get access to loans from the investment. SMEs are a growth sector in Honduras and play a central role in local development. It is estimated that around seven out of ten workers in Honduras are employed by an SME and they generate around 60% of Honduras’s GDP.

"DEG is strengthening Banco Atlántida, one of the most important financial institutions in Honduras. In its role as lead arranger, DEG has been able to mobilise additional capital and leverage contributions from other European development finance institutions, institutional investors and impact funds," said Monika Beck, member of DEG's Management Board, at the loan signing ceremony.

The commitment also has considerable potential for local development: "The loan volume is substantial and will support the further growth of Banco Atlántida's portfolio in the productive economy. DEG is thus fulfilling its development mandate and strengthening the local economy while creating new jobs in our partner country."