We make a special assessment when funding public borrowers in low-income countries under heavy debt burden, in accordance with the OECD "Recommendation of the Council on Sustainable Lending Practices and Officially Supported Export Credits".
While providing support to these countries, we consider the obligations of the countries to the IMF and the World Bank. We do not provide financial support to countries that have reached their commercial borrowing limits, or to the transactions that do not comply with the development strategy of the country in order to avoid creating more debt burden.
OK, but how?
- When we receive an application, we check the transaction against the list of low income countries which are subject to IMF/World Bank debt limits conditions,
- If there are no restrictions on the list, we consult debt sustainability analysis reports of the country published by the IMF/World Bank,
- We evaluate the country, the contractor and the transaction if we do not encounter any restrictions in the 1st and 2nd stage,
- We contact the IMF to inform that we intend to provide financing support for the application if the transaction meets the above criteria. At the same time, we contact the country’s relevant institution that is authorized to foreign borrowings (mostly Ministry of Finance or Treasury) in order to confirm that the financing support is within the commercial borrowing limit of the country.