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Top officials from Honduras and the Inter-American Development Bank (IADB) have signed a contract for a US$25mn fast-disbursing soft loan for a programme to maintain the stability and solvency of the Honduran banking sector.

Honduran finance minister Jos é Arturo Alvarado and IADB president Enrique Iglesias signed the document in a ceremony held during the annual meeting of the bank’s board of governors, which took place in Lima, Peru, between March 29-31.

The programme supported by the IADB will assist the Honduran government’s efforts to bolster bank supervision, improve financial information systems and introduce prudential norms based on the Basle core principles for effective banking.

A key goal of the programme is to avoid potential fiscal crises triggered by bank failures. It also seeks to ensure a sound and solvent financial system, build trust among depositors and offer borrowers a reliable source of financing.

This programme reflects the IADB’s strategy of helping Honduras ensure fiscal and macroeconomic stability and foster growth to reduce poverty. The programme has been closely coordinated with other projects to be supported by the World Bank and the International Monetary Fund to strengthen the Honduran financial system in a comprehensive manner.