Belmopan, Mon. Sept. 6, 2021– The Government of Belize made a historic BZ$31.1 million equity investment into the Development Finance Corporation (DFC). This increases the DFC’s capital adequacy ratio – providing the company with the funding necessary to increase lending initiatives to support Belize’s National Economic Recovery Program.
This investment by the Government of Belize is the largest equity investment in the DFC since its inception. In brokering the investment, the Government of Belize agreed to a debt-to-equity swap of over BZ$18 million which DFC owed to the Government. The remaining component of the investment consisted of the transfer of BZ$13 million in government assets already managed by DFC. This included a transfer of loan receivables and an $8 million cash allotment for the European Union Sugar Cane Replanting Program (SCRP) and the Belize Rural Credit Fund Program (RCF).
In return for its investment, the Government of Belize received a total of 3,115,559 shares brokered at a price of $10.00 per share, amounting to $31,155,586.67. In expressing their gratitude for the Government of Belize’s investment, DFC hosted a handing-over ceremony for the share certificate. A DFC press release further states, “This tangible investment by GOB confirms government’s commitment to supporting the crucial role the DFC as a development finance institution (DFI) exercises in Belize’s economy.”
This investment resulted from a proposal submitted to the Government of Belize back in September 2020. The proposal was a part of a larger scheme to garner support for the recovery of DFC’s operations. In March 2021, a newly elected board of directors informed management and staff of the Cabinet’s approval of the equity investment proposal.
In his address at the handing-over ceremony for the share certificates, Minister of State in the Ministry of Finance, Hon. Christopher Coye, said, “[The Briceño administration sees DFC as] an important institution to invest in and not to disregard. This $31.1M debt to equity conversion, including the transfer of GOB agency programs to DFC, represents the single largest equity investment by the Government of Belize into the DFC ever. As DFC notes, this injection ‘will facilitate on-lending primarily in the agriculture sector, at lower interest rates, and with fewer restrictions and conditions.’”
In accepting this equity investment, Henry Anderson, on behalf of the DFC’s board of directors, management and staff, expressed their gratitude for the government’s contribution. He said, “This investment allows DFC to rebalance its portfolio’s uninsured key financial ratios in line with its policy framework.”
Approximately sixty-five percent of the DFC’s investments have been made in the productive sector, with the majority of these investments allocated to agriculture and micro, small and medium enterprise (MSME) subsectors. As a result, the DFC is exposed to the associated risks of these sectors, including market disruption, disease, and the devastating effects of climate change.