Announcement of World Bank Assists Third Small-Scale Industry Project in Colombia on April 21, 1980

. OR IMMEDIATE RELEASE -VVorld Bank 1818 H Street, N.W., Washington, D.C. 204 33, U.SA • Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/81 Apr i 1 21 , 1980 WORLD BANK ASSISTS THIRD SMALL-SCALE INDUSTRY PROJECT IN COLOMBIA The World Bank has approved a loan of $32 million to help finance a third srnall-scale industry project in Colombia. The project will provide credit and technical assistance to small- and medium-scale enterprises in order to support the Colombian government's objective of increasing employ- ment and promoting more balanced regional growth. The project will provide financing to some 1,500 small- and medium- scale enterprises for making productive investments costing, on average, $55,000, and requiring a total of approximately $82.4 million over the next two and a half to three years. These investments are required for expansion, • renovation, or relocation cf the installed productive capacity of these enterprises. Colombia's small- and medium-scale industry, defined as manufacturing firms with 5 to 99 workers, represents about 92% of all manufacturing units and employs 42% of the labor force in factory manufacturing. It is respon- sible for 25% of manufacturing value-added and accounts for an estimated 25~ of net industrial investment. The small-· and medium-scale industries which will benefit from the loan are enterprises with total assets not exceeding $650,000. At least 58% of the proceeds of the loan will be channeled to the smaller firms with total assets below $300,000. It is estimated that the project will create some 6,000 to 7,500 new direct jobs with another 2,000 jobs created indirectly. About 70% of the subloans will be made outside the three large industrial centers (Bogota, Medellin, and Cali), thus fostering new economic activity in several regions. The Corporacion Financiera Popular (CFP), a government-owned development finance company, will be responsible for the appraisal, approval, supervision of subloans. The project will also have an important role in institution bu!lding as it will continue the work of strengthening the company started under the first two loans totalling $20.5 million provided by the World Bank for this sector. • The $32 million loan Lo the Banco de la Republica has the guarantee of the Republic of Colombia. It is for a term of 17 years, including 4 years of grace, with interest at 8.25% per annum. NOTE: Money figures are expressed in U.S. dollar equivalents.