OFID extends first-ever trade finance loan to Panama

Vienna, Austria, March 2, 2015. The OPEC Fund for International Development (OFID) has signed an US$20m trade finance term loan with Multibank, Panama. The loan represents OFID’s first ever trade finance loan in the country. The funds will be made available for the financing of imports and exports of a wide variety of products.

Multibank is the third largest privately owned Panamanian bank in Panama. It has a clear focus on wholesale banking and trade finance. Foreign trade is a very important sector in Panama, since the country is a regional hub for imports primarily from Asia. The country’s leading export goods (by importance) are: bananas, shrimp, gold, pineapple, iron waste, salmonid fish, fishmeal, copper waste and sugar.

Panama's main commercial partners are the United States and China. On the re-exporting side, the main products imported by the Colón Free Zone are pharmaceuticals and chemical products, textiles, machinery and electrical items, shoes and headwear. These products have mainly been imported from China, Singapore, the United States, Taiwan and Mexico. The same products are re-exported to the Latin American markets; mainly, Venezuela, Colombia, Puerto Rico and the Dominican Republic.

The agreement was signed by OFID Director General Mr Suleiman J Al-Herbish and the VP Treasury and Investment of Multibank, Mr Milciades Denis.

OFID and Panama first became partners in development in 2008, when a public sector loan was approved to co-finance a rural development project aimed at helping boost income-generating activities of around 36,000 individuals. Two subsequent loans helped fund the first two phases of the Panama Bay and City Sanitation Project, which is expected to raise living standards for over one million people. Panama was also a beneficiary country of three regional grants in the areas of energy and HIV/AIDS mitigation.