17 November 2020

Development Banks: Powerful instruments when facing a crisis


By Javier Díaz Fajardo 

Before the start of the crisis, generated by Covid-19, development banking had been working as a fundamental actor to achieve the Sustainable Development Goals (SDGs) with interesting stakes in social, environmental and economic issues. And although this work has never stopped, the health emergency required us to react quickly and focus our efforts on solving the liquidity needs of entrepreneurs, through regional and sectorial financing strategies, under favorable conditions.  

At Bancóldex, Colombia's business development bank, we take the recovery of micro, small, and medium-sized enterprises very seriously, specially in this complex context. Leveraged by our experience of more than 15 years offering microcredit through a network of microfinance institutions, we have supported microenterprises in what they need most: working capital, investment in modernization and training during the pandemic.  

During the pandemic, we have improved and deepen this support, through a portfolio of financial products that we call Colombia Responde, with which we have made an important regionalization effort to reach a large part of the national territory, working together with departments and municipalities, even in remote areasof the country, which at this time need all our support. In this sense, we have disbursed, in US $365 million approx., where we have mainly benefited microenterprises.  

We have also reached other audiences, strengthening and deepening the relationship with the microfinance institutions, with our network of allies and, finally, with the client. 

At Bancóldex, we firmly believe that, just as we have already provided short-term solutions, it is now up to us to strive to offer other medium- and long-term solutions that are sustainable and that help companies not only to survive, but also to modernize, invest in machinery and train themselves. This is what we are working on.   

It is in the most difficult moments when development banks can do more, this situation has allowed us to work quickly on solutions for our entrepreneurs and thus support the economic recovery that will allow us to improve the conditions of an entire country.  

As development banks, we have worked on concrete solutions, and lasr November 11 and 12, we met at the Finance in Common Summit, a unique opportunity that allowed us to share those experiences which have let us react in the short term, in a very immediate and counter-cyclical way, to face the COVID-19 crisis. In addition, we had the possibility to articulate ourselves, to review long term proposals, that support the recovery of companies, families and societies we live in.  

Without a doubt, this meeting was an opportunity that we public development banks owed ourselves, and that will enrich us, giving us the possibility to reflect on concrete and tangible products, with the experiences and results of the other countries.  The purpose that motivates us is that together we can build a common offer so that as a society we are able to overcome this crisis.