San José, Costa Rica, since 1956

State-Run Development Bank Approved in First Vote

The legislative National Assembly Oct. 12 approved in the first of two rounds of voting the creation of a new state-run bank that will be used to finance development and public works projects.

The bank, which has been a promise of the Sandinista government, will receive $1.9 million annually, or $7.9 million over the next four years .

Despite being approved by 84 of 92 lawmakers, there remains debate over the function and management of the bank.

Some opposition Liberal lawmakers claim the new state bank should not compete with the private microfinance institutions, and instead should focus resources on the agricultural and productive sector.

Others, meanwhile, expressed concern about transparency issues.

To address that concern, it was decided that an independent auditor would audit the bank once a year.

The new bank will gather government resources that are currently distributed among different state institutes and organizations, such as the Institute of Rural Development (IDR), the Rural Credit Fund (FCR), the Ministry of Agriculture and Forestry (MAGFOR) and the Institute to Support Small and Medium-sized Business (INPYME).

If passed in second vote and into law, the new financial institution will become the first state-run bank since the collapse of the banking system in 2000.


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