There is widespread consensus amongst economic circles regarding the soundness of the latest decisions made by the Central Bank with a view to encouraging growth in various sectors of the economy. The Central Bank recently announced that it was reducing the interest rate for agricultural, industrial and small business loans from 22.5 to 18 percent.
Likewise, it decided to extend loan guarantees in excess of RD$500 million to businesses in these areas to facilitate their access to further capital.
A lack of financing has been singled out as a major cause for the current sluggishness affecting these sectors.
The guarantees will be administered by the Development Investment Fund and INFRATUR – both affiliates of the Central Bank. The measures include the creation of a Shared Guarantee System that will offer loan guarantees to private banking institutions lending their own resources to these businesses.
The banks are currently recording high levels of liquidity and solvency.