IDB Invest, a member of the Inter-American Development Bank (IDB) Group, has signed a seven-year subordinated loan agreement for US$75 million with Republic Bank Limited (Republic Bank). The funds are directed to support Republic Bank’s digitization, as well as execution of its plans for increasing the size of its retail portfolio by providing small and medium-sized enterprise (SME) loans and housing loans for middle-income families. The partnership is expected to help Republic Bank’s consolidation as a leading financial institution across the Caribbean region, as part of its expansion strategy.
Funding for Republic Bank's digitization program will focus both internal and external aspects of its technological infrastructure. Internally, the program will support technology consolidation and enhancements for the centralization of operational services, significantly reducing costs and increasing the digitization of the Republic Group´s subsidiaries region-wide. The external digital processes will be reinforced as well by improving and increasing the capabilities of its current digital services.
Furthermore, the transaction will help the expansion of Republic Bank in the Caribbean by supporting the Bank’s service offerings with the needs of Trinidad and Tobago’s underserved markets.
This transaction is expected to contribute to five Sustainable Development Goals (SDG) of the United Nations Organization: Decent work and economic growth (SDG 8), Industry, innovation and infrastructure (SDG 9), Reduce inequalities (SDG 10), Sustainable cities and communities (SDG 11), and Responsible Consumption and Production (SDG 12).
Republic Bank plays an important role for both the SME and housing sectors, seeking to overcome existing barriers faced by these sectors by providing access to finance. Appropriate financing is a challenge for SME in Trinidad and Tobago, where only 11 percent of SME start-up funding comes from the banking system, while 70 percent comes from personal and family savings. In the housing sector, a shortage of land for residential housing and high prices are the main challenges to persons hoping to access affordable housing. Increased investment in low-cost housing, improved access to mortgage finance, and streamlined procedures for low and middle-income households are the main steps towards developing a sustainable solution.
IDB Invest’s financing will be complemented by a technical assistance program to support Republic Bankin developing a world-class environmental and social management system for Trinidad and Tobago.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a portfolio of assets of $12.1 billion under management and 329 clients in 21 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the needs of its clients.
About Republic Bank Limited
Republic Bank is a visionary organization, with a 182-year-long history of stability and financial strength and vast experience and success in the areas of commercial, retail, merchant and corporate banking. Republic Bank is a subsidiary of Republic Financial Holdings Limited – one of the region’s most successful financial groups. With assets, as at December 31, 2018, in excess of US$10.8 billion and equity attributable to shareholders of US$1.4 billion, Republic Financial Holdings is a global player which offers an extensive range of banking services through its 16 subsidiaries across the Caribbean and Ghana.