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Press Release

MIGA Supports Caja de Ahorros’ Commitment to Fund Mortgages for Low-Income Housing and Businesses Impacted by Pandemic in Panama

Also available in: Español

WASHINGTON DC, July 30, 2020 – MIGA, a member of the World Bank Group, has issued guarantees on a fifteen-year, US$250 million loan provided by Kairos Global Solutions S.A. (Kairos), and a five-year, US$150 million loan provided by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), to Caja de Ahorros (CA) of Panama. These guarantees will protect the lenders against the risk of Non-Honoring of Financial Obligations by a State-Owned Enterprise (NHFO-SOE).

The MIGA-guaranteed loan from Kairos, which is being arranged by Citi and funded in large part by institutional investors, will expand CA’s mortgage lending to low- and middle-income households in Panama, increasing access to affordable housing. The MIGA-guaranteed loan from BBVA will help finance CA’s response to the economic crisis brought on by COVID-19. Proceeds from the BBVA loan will be used to provide liquidity to small and medium enterprises (SMEs) and other companies to improve their resiliency and stimulate Panama’s economic recovery.

“MIGA’s support for Caja de Ahorros will help increase access to affordable housing, while also improving the resilience of SMEs and companies that employ economically vulnerable individuals at a time of uncertainty,” MIGA Executive Vice President Hiroshi Matano said. “This project highlights the role of MIGA in helping mobilize capital from international investors to deliver strong developmental outcomes.”

CA was established in part to help promote home ownership by providing affordable mortgages to working class Panamanians. CA requires long-term funding to support its current mortgage portfolio and pipeline, as well as provide balance sheet capacity for future growth. The US$250 million Citi-arranged loan, guaranteed by MIGA, provides such long-term financing, and will be used to issue mortgages on newly constructed homes with values of up to US$120,000. These mortgages are supported by Ley Preferencial, a government program which subsidizes interest rates to make purchasing a home more affordable, as well as promote new home construction, thereby reducing the country’s housing deficit. Currently, roughly 50 percent of CA’s loans in this segment are to women or women-headed households, helping to reduce Panama’s sizable gender gap in homeownership. This loan will also diversify and lower the cost of CA’s funding base, helping the Bank to better match assets and liabilities.

“MIGA’s guarantees have given Caja de Ahorros access to international long-term financing for the very first time, helping us to obtain lower borrowing costs and longer tenors than wouldn’t otherwise be available,” Caja de Ahorros’ General Manager, Andrés Farrugia G. said. “Given the tightening of credit markets around the globe, MIGA’s role is singular and invaluable.”

The Panamanian economy has been severely impacted by the COVID-19 global pandemic through declines in demand, trade, tourism, and foreign investment. As Panama has a dollarized economy and no central bank, it is difficult for the country to respond to economic shocks through monetary policy. SMEs, a major source of employment in Panama, face steep revenue drops. Banks, in response to the pandemic, have given customers grace periods on loan repayments through the end of 2020, but both companies and individuals face constrained credit markets, and the two state-owned banks, CA and Banco Nacional de Panamá, will play key roles in providing much-needed liquidity.

The US$150 million loan from BBVA, also guaranteed by MIGA, expands CA’s capacity to provide this liquidity in the form of working capital loans to SMEs and other companies, helping them play their crucial role in creating jobs and reactivating the Panamanian economy. These loans from CA will be all the more timely as global turmoil has forced private bank credit to pull back.

“The Citi-arranged MIGA-guaranteed loan will allow Caja de Ahorros to expand mortgage lending to low- and middle-income households in Panama which can help increase their access to affordable housing,” said Marcelo Gorrini, Panama Citi Country Officer. “This solution supports economic progress and is a testament to Citi’s longstanding commitment to Panama’s sustainable growth and development.”

José Ramón Vizmanos, BBVA's Head of Global Client Coverage, said, “We are very pleased to partner with Caja de Ahorros in its efforts to aid SMEs impacted by the pandemic. This financing is aligned with BBVA’s strategic priority to accompany our clients in their transition towards a more sustainable future. Banks are part of the solution for this crisis, and BBVA's commitment to its public sector clients is stronger than ever. We look forward to cooperating with MIGA in providing innovative financing solutions to support the Panamanian economy.” 

CA was established by the GoP in 1934 with a social mission to encourage good savings habits, offer financial education programs, and contribute to solving the country’s housing deficit by providing mortgages. Its extensive network, with 59 branches and 265 ATMs spread across the country, including in areas with little private bank presence, allows CA to fulfill this important social function by fostering financial inclusion. CA has over 2,000 employees, of whom 56 percent are women.




MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.

Since its creation, MIGA has issued over $59 billion in guarantees across 118 developing countries.


The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery.  This includes $50 billion of new IDA resources through grants and highly concessional loans.



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Also available in: Español