Gov’t Drafts Boost For Banks, Small Firms

December 5, 2008

To give a “much needed push” to the financial sector, President Oscar Arias and Finance Minister Guillermo Zúñiga have drafted two proposed bills this week that aim to lend a hand to businesses.

The bills, which still must be approved by lawmakers, would help provide credit to small and medium-sized companies with the goal of protecting the jobs of Costa Ricans across the board, said Arias.

The first bill entails a modification project on the budget law to inject $117 million into the supplemental budget.

The government is planning to lend $117.5 million to the three state banks – $50 million each to Banco de Costa Rica and Banco Nacional, and $17.5 million to Bancrédito.

This would help strengthen the banks’ wealth to provide them with the liquidity needed to facilitate credit, Arias said.

“Our financial system does not need a rescue,” said Arias. “However, a push would undeniably benefit us.”

The second bill proposes to modify the nation’s banking law to allow state banks to grant subordinate debt.

Presidency Minister Rodrigo Arias said this financial boost would be possible due to a current surplus in the treasury.

President Arias and Zúñiga urged legislators to approve the aid bills as soon as possible.

In addition, bank executives from the three state banks, which would benefit from the government’s plan of capitalization, met with Francisco Pacheco, the president of the Legislative Assembly, on Tuesday to urge the lawmaking body to swiftly approve the two government initiatives.

Others present at the event on Monday, such as Guillermo Quesada, general manager of Bancrédito, said they hope the approval from the Legislative Assembly comes in before the end of the year.

“We’re also hoping that the country’s employment rates do not drop but instead increase with the help from this financial push,” Quesada said.

Bancrédito focuses on helping the productive activities in sectors such as the agriculture industry, commerce and development of all areas that have to do with micro, small and medium companies.

 

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