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  • Writer's pictureThe San Juan Daily Star

Economic Development Bank rebounds, and then some, from 2021 deficit

Economic Development Bank President Luis Alemañy González

By The Star Staff

The Economic Development Bank of Puerto Rico (EDB) has rebounded since its bleak outlook in 2021, when the possibility of closure of the institution, which since 1985 was the main financing alternative for small and midsize entrepreneurs, had been raised, EDB President Luis Alemañy González said Thursday.

By February 2021, when he assumed the presidency, Alemañy González, who opposed the execution of the closure plan, decided along with his work team to rebuild the EDB, which had been responsible for the success of so many Puerto Rican entrepreneurs.

At the end of 2023, Alemañy González shared the formula for the radical turnaround of the institution, which previously had a deficit of $44 million and now is at $133 million in the black. The EDB has already recovered its financial stability and capitalization, increased its loan portfolio and projects itself as a real alternative for access to capital for new entrepreneurs and startups, among others.

It also has extremely attractive interest rates, which represents a competitive advantage, since the institution is not affected by the increase in interest rates imposed by the Federal Reserve.

In addition, the bank has obtained a significant reduction in the nonperforming loans (NPL) ratio, “from 60% in 2021, to 18% in 2022 and 7% in 2023,” the EDB president noted.

Alemañy González added that the EDB is being more aggressive in the analysis of the financing cases in process that are currently in the pipeline for a total of some $65 million, some of which exceed a historical borrowing margin of $1 million.

“It is with great satisfaction that today we see the result of a plan that we established and was executed in an excellent way and with the effort of all the staff, bearing in mind our commitment and responsibility toward entrepreneurs who have the desire to establish their businesses and need an alternative that adjusts to their particular realities,” Alemañy González said.

He also emphasized that among the achievements that contributed to the EDB’s liquidity and stabilization was the work done to achieve a million-dollar restructuring of the bank’s debt.

It also contributed to capitalization, a request they submitted to the U.S. Treasury Department for which they received a historic allocation of funds, through the State Small Business Credit Initiative program.

During 2023, under a matching program with other financial institutions, the EDB impacted some 20 small and midsize merchants and new entrepreneurs by helping sectors such as restaurants, tourism, retail, services, agricultural production, agritourism, biosciences and renewable energy, among others.

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