Washington, D.C., 23 November 2009 – The World Bank’s Board of Directors approved a US$114.5 million loan to expand opportunities for Guatemala’s most vulnerable groups and contribute to improving the quality of life for people living in 130 municipalities (mostly rural), which are to benefit from a cash transfer program called My Family Makes Progress (Mi Familia Progresa, MiFaPRo) during 2010.
The loan supports the Guatemalan government’s efforts to reduce extreme poverty and inequality in the country, optimizing MiFaPRo’s effectiveness through greater attention to educational, sanitary and nutritional services in the country’s poorest communities, which harbor some 960,000 homes.
The Project also contemplates improvements to key rural roads in 46 poor municipalities, in order to connect families with services and markets, and to promote productive infrastructure through irrigation and water sub-projects. Aid will mostly focus on improving nutrition and health services in 70 vulnerable communities.
“Within the last decade, Guatemala has managed to make progress. However, challenges still remain and the government is tackling them in a scenario of global crisis. This loan is aligned with government priorities and needs, contributes to improving the quality of life of the poorest people and to human capital formation; it will also strengthen the government’s capacity to coordinate programs”, Laura Frigenti, World Bank Director for Central America, indicated.
This multi-sector project aids the government in areas where the World Bank has ample experience, such as conditional cash transfers and rural development. It will also contribute to strengthening MiFaPRo’s administrative and monitoring processes, as well as its control mechanisms, and to the creation of mechanisms to gather information, generate knowledge and define a mid-term social protection strategy.
The fixed term loan has a 23.5 year maturity period. The grace period is 8.5 years.
