Consultancy Support to CABEI under the LAIF Green MSME Program
Area of Operation: Honduras
Duration of Assignment: October 2022 – Present
Name of Client: intec (contracted by Central Bank for Economic Integration (CABEI) and KfW)
Project Description:
Cooperation between the Central American Bank for Economic Integration (CABEI) and KfW have established financial contribution funds that can be used to finance the Technical Cooperation and Partial Credit Guarantees (PCG) components of the Environmental Credit Program for MSMEs II.
The proposed PCG program will target MSMEs that have made environmental investments and includes companies that offer green services and / or products. Guarantees will also be used to finance loans to companies in sectors that were affected by the COVID-19 pandemic, including: manufacturing, tourism, agri-food chain, construction, commerce, and service.
Support in the design of the guarantee fund, its implementation, monitoring and continuous improvement of the fund’s design, will contribute to the achievement of the Program’s objectives and to the formalization of MSMEs’ access to financing and the stability of the region’s financial sectors.
Our Services:
- LANDT is providing support to the central American Bank for Economic Integration (CABEI) and its Credit Guarantee Fund (CGF) by improving the CGF design, improving and updating the operations manual, its monitoring and evaluation framework, its corporate governance and legal agreements, its marketing strategy, financial modelling, and external evaluation.
- LANDT is also supporting in the areas of risk, reporting and audits, and product development methodology.
- Preparing and refining the final guarantee manual and sub-manual and any modifications that may be necessary over the life of the fund.
- Supporting in defining the statutes of the Supervisory Committee and the Administrator.
- Preparing a proposal for a CABEI-IFI agreement to support the coverage guarantee certificates (CGC) that will be in line with CABEI’s LGC and the guidelines of the CABEI’s legal department.
- Conducting a leverage rate analysis to determine if the scope and impact of the guarantee fund in the MSME sector should be increased.
- Conducting an evaluation to measure the additionality of the guarantee fund and impact at the MSME level in terms of sales, wages, and productivity.
- Defining and implementing a comprehensive M&E policy system that can allow the guarantee fund to monitor impact of the guarantees at the IFI level, at the MSME level and establish key performance indicators (KPIs) to evaluate the guarantee fund itself and the impact of the Green MSME Initiative II (LAIF/KfW)
- Subsequently elaboration of recommendations for the continuous improvement of the operation and design of the guarantee fund
- Conduct ongoing review / compliance checks for guarantee operations (including new guarantee issuance, extension requests, restructuring requests etc.)
- Elaboration of a financial model for the guarantee fund with its respective recommendations on market and demand study of guarantees (including issues such as moral hazard).
- Support in the visibility and promotion of the guarantee fund at the level of IFIs and MSMEs, to help increase the number of interested IFIs and the number of new clients.