Gisela Sanchez, the new head of the Central American Bank for Economic Integration (CABEI) indicated she would be putting the brakes on loans to Nicaragua and El Salvador. Nicaragua’s Minister of Finance protested, reminding the new bank president that Nicaragua voted for her.
By Ivan Olivares (Confidencial)
HAVANA TIMES – Ivan Acosta, Nicaragua’s Minister of Finance and Credit, sent a letter to the new head of the Central American Bank for Economic Integration (CABEI), Gisela Sanchez, rejecting her decision to limit Nicaragua’s access to new loans because the country has already received more than the reasonable amount that can be lent by the bank to a single member.
By nature, financial institutions of all types and levels carefully review the levels of risk implied in concentrating loans on one client or sector, awarding them high percentages of the credit portfolio. Such a review led the Costa Rican bank executive to declare a near-moratorium on the approval of new sums for Nicaragua and El Salvador. Together, the two nations represent nearly half of all the loans awarded by the Bank.
“It’s a fact that at this moment we have a greater level of concentration in the portfolio, with Nicaragua and El Salvador the countries receiving the most funds. My objective is for us to have a more diversified portfolio,” stated the president of the multilateral bank in an interview with Redaccion Regional, a Central American media consortium. During this same interview, she announced her commitment to “protect the exposure limits per country and diversify the portfolio.”
Letter of protest sent by Nicaraguan Finance Minister
In his protest letter, Acosta told Sanchez that her affirmation that the operations approved for Nicaragua were “’from a scheme of little balance, and without technical rigor’ (…) are refuted by the recognition received from both CABEI and other international financing organizations, evidenced in the results of portfolio evaluations that determine quality in execution, payment and duly certified accountability during these last 17 years.”
Acosta reminded the CABEI president that, as a founding partner, Nicaragua has “the right to solicit financing for its development programs, according to the established requirements and policies,” hence he considered that “her declarations don’t contribute to the management exercised by the Bank and to the spirit of Central American integration.”
The mission also hinted indirectly at an attempt to disparage the intentions of the new administration of the regional entity, by recalling that: “in the multilateral financial institutions, the policies and strategic vision are defined in the Governing Board Assemblies and respond to the Bank directive board, in their role as representatives of their governments as shareholding partners.”
Finally, Acosta recalled that Sanchez ha