Law on Financial Support for Productive Sectors of Honduras
Congreso Nacional
- Decree: 67-2009
- Published: June 8, 2009
- Issuing body: Congreso Nacional
- Gazette: 31,930
- Category: Financial & Tax
Summary
This law reforms the 2008 Financial Support Law to expand access to loans of up to 10 billion Lempiras. It now includes more financial institutions, especially BANADESA Bank to provide microloans to small business owners, municipalities, and productive sectors affected by economic crisis. The goal is to reduce poverty by providing credit to populations excluded by commercial banks.
Considerations
Whereas, through Decree No. 175-2008 dated December 18, 2008, the National Congress issued the Law of Financial Support for the Productive Sectors of Honduras, by means of which the Central Bank of Honduras is authorized to enable financial resources in an amount of five billion Honduran Lempiras (L.5,000,000,000.00) up to ten billion Honduran Lempiras (L.10,000,000,000.00), intended for financial support of the commercial banking system, which shall be channeled through the Honduran Bank for Production and Housing (BANHPROVI) for the granting of credits to the housing sector in the amount of forty percent (40%); to the rehabilitation of productive units that were affected by the climatic phenomena that occurred in the month of October of the year 2008, twenty percent (20%); and, to microcredit and other productive sectors forty percent (40%), financial resources that shall be managed by the Honduran Bank for Production and Housing (BANHPROVI) under the trust arrangement.
Whereas, the Law of Financial Support for the Productive Sectors of Honduras provides that resources be allocated to financial support of commercial banking, which excludes the participation of other financial institutions authorized and regulated by the National Commission of Banks and Insurance, as well as the National Bank of Agricultural Development (BANADESA), leaving out of its benefits the population that traditionally uses the financing of such institutions, particularly the microcredit segment which constitutes one of the niches with limited access to banking services by commercial banks.
Whereas, the financing of microcredit within a strategy for promoting development constitutes one of the most viable alternatives for the improvement of the quality of life of the population excluded from access to credit and, therefore, stands as a key factor for poverty reduction, an unavoidable and paramount task in the direction of public policies in developing countries.
Whereas, it is appropriate to incorporate other institutions of the financial system regulated and supervised by the National Commission of Banks and Insurance as well as the National Bank of Agricultural Development (BANADESA), to expand the scope of intermediaries in the channeling of credit resources and to favor access to credit for the population excluded from bank credit; therefore, it is timely to provide that now in particular the National Bank of Agricultural Development (BANADESA), be allocated by this institution an amount of up to two hundred fifty million Honduran Lempiras (L.250,000,000.00), for the support of microcredit, resources that may be increased depending on the evolution of demand and the evaluation and analysis of the Honduran Bank for Production and Housing (BANHPROVI) as trustee institution, to which end it is necessary to reform the Law of Financial Support for the Productive Sectors of Honduras.
Whereas, among the productive destinations that are beneficiaries of the resources of the Law of Financial Support for the Productive Sectors of Honduras, the sector that holds twenty percent (20%) of the resources is represented by economic units that were affected by the climatic phenomena that occurred during the month of October of the year 2008; however, taking into account the problems faced by some productive units derived from the economic recession and international financial crisis, this Legislative Branch considers it appropriate to include them as an object of financing within that percentage, with the objective that they may be able to restructure their debts so that they achieve better levels of competitiveness. Likewise, this Branch of State considers it vital to provide municipalities with resources intended for infrastructure projects, an effort that results in an increase in the levels of economic and social development of the communities, therefore it is appropriate to incorporate them as eligible for financing within the sector represented by microcredit and other productive sectors.
Articles
Amends Articles 1 and 2 of the LAW OF FINANCIAL SUPPORT FOR THE PRODUCTIVE SECTORS OF HONDURAS, contained in Decree No. 175-2008 dated December 18, 2008 and published on December 23 of the same year, which shall be read as follows:
Authorize the Central Bank of Honduras to exceptionally and with emergency character, enable financial resources in the amount of FIVE BILLION LEMPIRAS (L.5,000,000,000.00) up to TEN BILLION LEMPIRAS (L.10,000,000,000.00) channeled through the Honduran Bank for Production and Housing (BANHPROVI) and intended in accordance with Law to Financial Support of the National Banking System and other financial institutions authorized and regulated by the National Commission of Banks and Insurance, with the purpose of financing the housing sector in forty percent (40%); the rehabilitation and debt restructuring of productive units affected by climatic phenomena and by economic recession and international financial crisis, twenty percent (20%); and, microcredit, municipalities and other productive sectors forty percent (40%), these percentages may be varied depending on the credit demand of the benefited sectors. Within the percentage allocated to microcredit and other productive sectors, up to TWO HUNDRED FIFTY MILLION LEMPIRAS (L.250,000,000.00) may be channeled through the Honduran Bank for Production and Housing (BANHPROVI) for the National Bank of Agricultural Development (BANADESA) to grant financing for microcredit directly or through intermediaries such as Rural Savings Banks, Cooperatives, OPDF's, Chambers of Commerce, OPUS and similar organizations, qualified by said Institution, resources that the National Bank of Agricultural Development (BANADESA) shall grant observing viability and profitability criteria. The amount provided for said Development Bank to finance microcredit may be increased depending on the evolution of demand and subject to evaluation and analysis of the trust and approval by the Central Bank of Honduras (BCH) in its capacity as trustor. The National Bank of Agricultural Development (BANADESA) is authorized to, in the channeling of resources that it performs, share with intermediaries the intermediation margin that results applicable in accordance with the credit policies established by the Honduran Bank for Production and Housing (BANHPROVI).
This Decree shall enter into force as of the day of its publication in the Official Gazette, La Gaceta. Given in the city of Tegucigalpa, municipality of the Central District, in the Session Hall of the National Congress, on the twelfth day of the month of May of two thousand nine. ROBERTO MICHELETTI BAÍN PRESIDENT JOSÉ ALFREDO SAAVEDRA PAZ SECRETARY GONZALO ANTONIO RIVERA SECRETARY To the Executive Branch. Therefore; Let it be executed. Tegucigalpa, M.D.C., May 26, 2009. JOSÉ MANUEL ZELAYA ROSALES PRESIDENT OF THE REPUBLIC The Secretary of State in the Office of Finance. REBECA PATRICIA SANTOS
Empower the Central Bank of Honduras to constitute, with the resources indicated in the preceding Article, a trust for administration and investment in the Honduran Bank for Production and Housing (BANHPROVI), under the following conditions:
- a)
Amount: Five billion Lempiras (L.5,000,000,000.00) up to ten billion Lempiras (L.10,000,000,000.00);
- b)
Term: Up to twenty-five (25) years;
- c)
Purpose: Financial support to the following economic sectors: I. Housing sector, particularly for the low-income population; II. Rehabilitation and debt restructuring of productive units affected by climatic phenomena and by economic recession and international financial crisis; and, III. Microcredit, municipalities and other productive sectors.
- d)
Trustor and Beneficiary: Central Bank of Honduras;
- e)
Trustee: Honduran Bank for Production and Housing (BANHPROVI);
- f)
Trust Commission: The Honduran Bank for Production and Housing (BANHPROVI) in its capacity as trustee, shall receive a commission to be agreed upon with the trustor, which must be adjusted to the parameters applied by said Institution in the trust management of trusts constituted by the State; and,
- g)
Treatment of Trust Income: The net returns produced by the trust, deducting the trustee's commission, shall serve to capitalize the trust assets. These resources shall be used to grant new financing to the productive sectors indicated in literal c) of this Article, with the exception of that designated in subsection II. The term of the new credits shall be conditioned to the remaining term of the trust.
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