(Bloomberg) -- The US is guaranteeing $42 million in loans by the Dominican Republic’s largest bank as it pushes to boost ties and counter Chinese inroads in Latin America and the Caribbean.
The US International Development Finance Corp. is providing the support to Banco de Reservas de la Republica Dominicana to support women entrepreneurs, small businesses and green lending, the agency said in a statement. The announcement came during a visit by Samantha Power, President Joe Biden’s chief for humanitarian aid, and DFC deputy head Nisha Biswal.
A loan guarantee is a common form of development assistance that backstops lending to riskier borrowers by promising to take on the obligations if there’s a default. The portfolio guarantees from the DFC will cover up to 50% of losses due to default and are being subsidized by the US Agency for International Development, according to a DFC spokesman.
The economy of the Dominican Republic likely will grow 4.8% this year, among the fastest rates in the Americas, fueled by record-breaking tourism and foreign direct investment, according to economists surveyed by Bloomberg. President Luis Abinader is set to host the next Summit of the Americas, a US-originated meeting of heads of government from the hemisphere, in 2025.
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