IDB approved $ 300 million guarantee for Ecuador

Ecuadornews:

For the first time, the Inter-American Development Bank (IDB) approved a $ 300million guarantee that will allow Ecuador to issue the first sovereign social bond in Latin America and the Caribbean.

The program will finance the construction of social housing under the Casa para Todos program, the international organization said in a press release on Thursday, December 6. With the operation, a mechanism will be put into operation to grant mortgage loans to meet the demand for new housing by middle-income families that cannot access affordable housing.

The main causes of the housing deficit in Ecuador are the limited savings capacity of the population and the lack of long-term mortgage loans and affordable rates. This is a relevant problem, because the country’s housing deficit increases at the rate of 40,000 homes per year due to the formation of new homes.

The program also foresees establishing incentives for credits granted in medium and small cities, and monitoring access to women since only 5% of Ecuadorian women have a mortgage credit line, compared to twice the number of women in other income countries average, says the IDB.

The issuance of the Social Bond will be made in international markets and it is foreseen to place institutional investors specialized in social matters.

TheIDB’s guarantee for the issuance of the Social Bonus is expected to leverage more resources for the social housing policy in Ecuador, as well as to boost the Social Bonds market in the Region. The maximum term of the guarantee will be25 years, with a weighted average life of up to 15.25 years. (I)

Source: https://www.eltelegrafo.com.ec/noticias/economia/4/bid-garantia-ecuador