Commercial bank discount fund

The Central Bank will implement the project. The Discount Fund will be open to all four local commercial banks (Barclays, Atlantic, Nova Scotia, and the Royal Bank of Canada) on a first come, first served basis. Eligible sub-borrowers will be individual citizens or legal residents of Belize or the United States; corporations or partnerships organized under Belizean or U.S. law of which over 25% of all voting stock is owned by U.S. or Belizean stockholders; or joint ventures or unincorporated associations composed entirely of those eligible under the previous two categories. Eligible subprojects (SP"s) will be those involving the production, processing, or export cycle of any agricultural product grown in Belize (except crops ineligible for A.I.D. assistance). Illustrative SP"s are in grain markets, mangos, shrimp fishing, bananas, edible oils, agricultural credit, logging operations, timber farming, refractory materials, export packaging manufacturing, canned goods, agricultural and forest waste, agricultural waste for animal feeds, and hydro-electric plants. SP"s are not expected to exceed $1 million; those exceeding $500,000 will be subject to A.I.D. approval. The Central Bank will discount 75% of eligible subloans at 6% less than the prime rate (currently 16%), with the grace period and repayment schedule for the discount matching that of the retail credit. The lending bank will provide the remainder of SP credit. Customer equity is expected to provide the equivalent of 40% of the value of each SP. Subloans will be granted at no less than the prime, although smaller or riskier subloans will probably carry higher rates. Up to 40 new projects will be financed, enabling the Central Bank to establish the Discount Fund on a permanent basis. Institutional changes envisioned by the project are the extension of credit for longer terms (5-15 years, and including up to 2 years grace) than currently offered and the acceptance of appraisal banking as a normal part of bank operations.