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Caja de Ahorros de Panama

$350 million
Financial Services
Summary of Proposed Guarantee

Project description

This summary covers loans from bank(s) yet-to-be-identified to Caja de Ahorros, a state-owned bank in Panama. MIGA guarantees of up to US$350 million for a period of up to 15 years against the risk of Non-Honoring of a Financial Obligation by a State-owned Enterprise (NHFO-SOE) are being considered.

The proposed project involves the expansion of mortgage lending to lower-income and women-headed households by Caja de Ahorros, a wholly-owned financial institution of the Government of Panama. As one of two state-owned banks in Panama, Caja de Ahorros is a key agent in helping the Government of Panama achieve two different social objectives: (i) helping provide adequate housing to the low-income segments of the Panamanian population; and (ii) helping encourage financial literacy and personal savings.

Environmental Categorization

This project is Category FI-3 according to MIGA’s Policy on Environmental and Social Sustainability. The proceeds of the MIGA guaranteed loan will be used exclusively for retail mortgages, which are expected to have no to low adverse environmental and social (E&S) risks and/or impacts. MIGA also reviewed the complete portfolio of Caja de Ahorros, and determined that the existing and expected future portfolio exposure includes business activities that predominately have minimal or no adverse environmental and social impacts. The project will be required to comply with MIGA’s E&S requirements that include the applicable aspects of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts and Performance Standard 2: Labor and Working Conditions. Caja de Ahorros will also be required to inform MIGA if there are any changes in the scope of its operations that affect the E&S risk of its portfolio.

Development impact

MIGA’s guarantee would allow Caja de Ahorros to access international long-term financing for the first time, realizing loan prices and tenors that would otherwise not be available to the bank. Establishing a repayment track record with international lenders could help Caja de Ahorros raise future financing through loans or the bond market should the need arise.

The project aims at strengthening and diversifying the Bank’s asset liability management in order to support a more sustainable loan growth targeted for its lower-income social housing lending with a potential focus on women-headed households. By supporting access to affordable mortgages, the project would provide an important economic benefit to the population through wealth formation, improved quality of life, and job creation. MIGA would also help Caja de Ahorros target mortgage lending to low-income female borrowers.

The project is well aligned with the World Bank Group Country Partnership Framework FY2015-2021 for Panama in its second pillar of “Ensuring Inclusion and Opportunities for Marginalized and Indigenous Groups” under its objective of complementing social assistance with productive inclusion. This Pillar supports the government’s priority of greater inclusion, with an emphasis on efficiency and effectiveness of social programs, creation of opportunities for the most vulnerable, and access to and quality of service delivery. The project increases access to affordable housing finance to low-income groups, while promoting inclusive home-ownership. In addition, the project aligns with the government’s 2019-2024 National Development Plan (Plan Estratégico de Gobierno), in its objective to develop programs and actions that offer solutions to affordable housing.



MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring direct investment clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities. MIGA support to Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations as per the requirements of Performance Standards 1. 

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW