Additional Investment for Sustainable Alternative Development
AECOM International Development is implementing the MIDAS Project (Más Inversión para Desarrollo Sostenible Alternativo), which aims to assist Colombia in undertaking critical reforms to maintain its economic path of generating strong medium-term income and jobs and creating new and alternative licit income sources. The MIDAS Project supports economic policy and institutional reforms through targeted technical assistance in selected cross-cutting areas, with a significant impact on overall competitiveness and growth. The major areas are finance, labor, sanitary and phyto-sanitary (SPS) measures, technical barriers to trade, agriculture, environment, strengthening customs, developing a competitive telecommunications sector, promoting competitiveness, encouraging SME participation, and energy.
Reform and strengthening of Colombia’s financial services is a key part of the policy component of the MIDAS project, directly administered by AECOM International Development. Our work in this area responds to the important and urgent need of removing the existing legal and regulatory barriers and improving financial intermediation. Achieving this objective will help Colombia establish a more efficient financial architecture, which will in turn substantially expand access to financial services for low-income populations, particularly in the rural areas, and support the growth of businesses and assets for producers and families. AECOM International Development work encompasses activities to develop functional and sustainable finance programs for microenterprises and SMEs, as well as a long-term financing program that introduces financial alternatives in urban and rural communities, and improves the efficiency of existing credit agencies FINAGRO and Banco Agrario. These activities are reinforced by technical assistance for cross-cutting reforms of the financial sector and by an institutional strengthening program to improve risk-based supervision.
Through the support of the MIDAS Project, reforms have been carried out that formally allowed the operation of non-banking financial correspondents, such as retail establishments that enter into agreement with banks to set up a user window to provide financial services, which are particularly useful in the areas where banks are not present. Other policy reforms implemented by the Government of Colombia include the deregulation of interest rate ceilings, the low amounts accounts law, and policies on transparency of credit card rates and microfinance. A study of transaction costs of FINAGRO, the state-owned agricultural credit agency, is expected to lead to reforms to improve the efficiency of lending in rural areas. Other activities to be supported include credit scoring on loan applications and development of a data warehouse for the Financial Superintendency and risk management procedures for supervising SMEs.
