The World Bank approved a loan of $216 million on 15 November towards the development of the financial sector. It will be used for a project involving policy reforms and private sector investment in high-priority economic activities.
A $200 million line of credit will be made available to participating financial institutions for on-lending to private enterprises at the prevailing market interest rates. Technical assistance will be provided for institutional development and to build up the capacity of the securities and insurance markets. The project is also designed to promote a set of policy reforms, including further strengthening of the financial regulatory framework and the use of new financial instruments.
The World Bank loan is repayable over 20 years with a five-year grace period. The total project cost is estimated at approximately $1,000 million. The Asian Development Bank is expected to provide co-financing of $100 million, with the remainder of the costs being covered by participating financial institutions and private sector borrowers. The World Bank approved a $150 million loan in 1989 for a financial sector adjustment programme (MEED 26:8:94).