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Country Commercial Guides for FY 2000: Belize Report prepared by U.S. Embassy Belize City, released July 1999 Note*

VIII. PROJECT FINANCING

BRIEF DESCRIPTION OF BANKING SYSTEM:

BELIZE'S FINANCIAL SYSTEM IS LIMITED TO FOUR COMMERCIAL BANKS (SEE LIST BELOW), A PARASTATAL LENDING INSTITUTION (THE DEVELOPMENT FINANCE CORPORATION), AND SEVERAL SMALL CREDIT UNIONS NATIONWIDE. THE CENTRAL BANK OF BELIZE REGULATES THE LIQUIDITY AND CASH RESERVE REQUIREMENTS AS WELL AS THE INTEREST RATE STRUCTURE OF THE COMMERCIAL BANKS.

FOREIGN EXCHANGE CONTROLS AFFECTING TRADING:

UNDER THE EXCHANGE CONTROL REGULATIONS (CHAPTER 43 OF THE LAWS OF BELIZE - 1980), ONLY THE CENTRAL BANK OF BELIZE AND AUTHORIZED DEALERS/DEPOSITORIES (I.E., COMMERCIAL BANKS) MAY DEAL IN FOREIGN CURRENCIES. IN ORDER TO PAY FOR GOODS AND SERVICES PROCURED OUTSIDE OF BELIZE IN A FOREIGN CURRENCY, A FOREIGN EXCHANGE PERMIT MUST BE OBTAINED FROM AN AUTHORIZED DEALER OR DIRECTLY FROM THE CENTRAL BANK OF BELIZE.

THE PERMISSION OF THE CENTRAL BANK OF BELIZE IS ALSO REQUIRED TO SECURE A LOAN FROM OUTSIDE BELIZE THAT INVOLVES A FOREIGN CURRENCY, AND ALSO TO SERVICE REPAYMENT OF FOREIGN DEBT. ACCORDING TO THE BELIZE INVESTMENT GUIDE, "THE NECESSARY APPROVALS CAN BE EASILY SECURED IN THE CASE OF GENUINE, APPROVED ENTERPRISES."

FOREIGN INVESTORS ARE REQUIRED TO REGISTER ANY INVESTMENTS MADE IN BELIZE WITH THE CENTRAL BANK IN ORDER TO FACILITATE THE REPATRIATION OF PROFITS, DIVIDENDS, ETC. OFFICIALLY, NO PERSON, OTHER THAN AUTHORIZED DEALERS AND AUTHORIZED DEPOSITORIES, MAY RETAIN ANY FOREIGN CURRENCY IN THEIR POSSESSION WITHOUT THE CONSENT OF THE CENTRAL BANK OF BELIZE. IN PRACTICE, HOWEVER, MANY LOCAL BUSINESSES ACCEPT PAYMENT IN U.S. CURRENCY.

FOREIGN EXCHANGE CONTROLS CAN BE SUMMARIZED BY THE FOLLOWING RULES AND GUIDELINES:

- RESIDENTS AND NON-RESIDENTS NEED PERMISSION TO BUY FOREIGN CURRENCY FOR WHATEVER PURPOSE;

- AUTHORIZED DEALERS (I.E., COMMERCIAL BANKS) ARE ALLOWED TO SELL FOREIGN CURRENCY UP TO $2,500 FOR PRIVATE TRAVEL AND UP TO $10,000 FOR BUSINESS TRAVEL PER CALENDAR YEAR; REQUESTS IN EXCESS OF THESE AMOUNTS MUST BE APPROVED BY THE CENTRAL BANK OF BELIZE;

- EXPORTERS ARE REQUIRED TO REGISTER THEIR EXPORTS WITH THE CENTRAL BANK, GUARANTEEING DELIVERY OF THEIR FOREIGN EXCHANGE EARNINGS;

- AUTHORIZED DEALERS MAY AUTHORIZE PAYMENTS FOR IMPORTS, WHERE GOODS ARE PAID FOR THROUGH LETTERS OF CREDIT OR BANK COLLECTION. THEY MAY ALSO AUTHORIZE PAYMENTS FOR IMPORTS AGAINST COPIES OF INVOICES AND CUSTOMS ENTRIES, WHERE THE DOCUMENTS SHOW THAT THE GOODS WERE OBTAINED ON CREDIT;

- AUTHORIZED DEALERS MAY ALSO APPROVE INDIVIDUAL PREPAYMENTS UP TO A MAXIMUM OF $1,000, IN EACH CASE, ON PRESENTATION OF THE ORIGINAL PRO FORMA INVOICE AND WHERE PAYMENT IS TO BE MADE DIRECTLY TO THE SUPPLIER;

-ALL OTHER APPLICATIONS FOR THE PREPAYMENT OF IMPORTS SHOULD BE FORWARDED TO THE CENTRAL BANK OF BELIZE ACCOMPANIED BY A COPY OF THE PRO FORMA INVOICE CERTIFIED BY THE IMPORTER OR HIS/HER AGENT AND BY EVIDENCE THAT SUCH ADVANCE PAYMENT IS A CONDITION OF THE CONTRACT, OR IN THE ABSENCE OF SUCH DOCUMENTARY EVIDENCE, A DECLARATION BY THE SUPPLIER THAT THE GOODS WILL BE DISPATCHED IMMEDIATELY ON RECEIPT OF ADVANCE PAYMENT;

- BELIZEAN RESIDENTS, WHO WISH TO BORROW ABROAD AND WHERE DEBT SERVICE WILL BE IN HARD CURRENCIES, MUST APPLY TO THE CENTRAL BANK OF BELIZE FOR PERMISSION TO DO SO.

GENERAL FINANCING AVAILABILITY:

THE AVAILABILITY OF FINANCING FOR ECONOMIC ACTIVITIES IS LIMITED TO SHORT-TERM CREDIT. CURRENT PRIME LENDING RATES OF LOCAL BANKS ARE HIGH, RANGING FROM 15 PERCENT FOR MORTGAGE LOANS TO 17 PERCENT FOR PERSONAL LOANS. THE WEIGHTED AVERAGE IN 1997 WAS 16.5 PERCENT. THE DEVELOPMENT FINANCE CORPORATION (DFC), A QUASI-GOVERNMENT FINANCIAL INSTITUTION, PROVIDES LOANS TO ALMOST ALL SECTORS OF THE ECONOMY. THE DFC'S THREE LARGEST LOAN PORTFOLIOS INCLUDE THE TOURISM, AGRICULTURE AND CONSTRUCTION SECTORS.

HOW TO FINANCE EXPORTS AND METHODS OF PAYMENT:

LETTERS OF CREDIT ARE THE MOST COMMON FORM OF PAYMENT ARRANGEMENT USED BY IMPORTERS IN BELIZE.

TYPES OF AVAILABLE EXPORT FINANCING AND INSURANCE:

LOCAL EXPORT FINANCING IS GENERALLY NOT AVAILABLE FROM COMMERCIAL BANKS NOR FROM ANY OTHER FINANCIAL INSTITUTION IN THE COUNTRY.

PROJECT FINANCING AVAILABLE:

INTERNATIONAL DEVELOPMENT AGENCIES SUCH AS THE WORLD BANK, THE INTER-AMERICAN DEVELOPMENT BANK, THE CARIBBEAN DEVELOPMENT BANK, AND THE BRITISH DEPARTMENT FOR INTERNATIONAL DEVELOPMENT PROVIDE FUNDS FOR DEVELOPMENT PROJECTS IN BELIZE. THESE PROJECTS HAVE GENERALLY BEEN AIMED AT ALLEVIATING POVERTY AND IMPROVING PUBLIC HEALTH, EDUCATION AND ROADS. OPIC AND THE EXPORT-IMPORT BANK OF THE UNITED STATES OFFER LIMITED FINANCING FOR AMERICAN BUSINESS VENTURES IN BELIZE AND U.S. EQUIPMENT SALES.

LIST OF LOCAL COMMERCIAL BANKS:

ATLANTIC BANK LIMITED
FREETOWN ROAD
BELIZE CITY, BELIZE
CONTACT: SANDRA BEDRAN, GENERAL MANAGER
TEL: 501-2-77124
FAX: 501-2-33907

BARCLAYS BANK PLC
ALBERT STREET
BELIZE CITY, BELIZE
CONTACT: JORGE OMAR ESPEJO, MANAGER
TEL: 501-2-77211
FAX: 501-2-78572

THE BANK OF NOVA SCOTIA
ALBERT STREET
BELIZE CITY, BELIZE
CONTACT: CLAUDE MARCEL, MANAGER
TEL: 501-2-77027
FAX: 501-2-77416

THE BELIZE BANK
MARKET SQUARE
BELIZE CITY, BELIZE
CONTACT: LOUIS SWAZEY, SENIOR VICE PRESIDENT
TEL: 501-2-77132
FAX: 501-2-72712