---
title: "CAF Approves Record $500 Million Loan to Panama for Agriculture and Women-Led Businesses"
date: 2026-09-11
author: "Panama Daily News"
url: https://panamadaily.news/2026/09/11/caf-approves-record-500-million-loan-to-panama-for-agriculture-and-women-led-businesses/
categories:
  - "Economy"
---

# CAF Approves Record $500 Million Loan to Panama for Agriculture and Women-Led Businesses

Development Bank of Latin America and the Caribbean (CAF) has formalized a $500 million loan to Panama’s state-owned Banco Nacional, the largest credit operation CAF has ever extended to a bank in the country, as the nation’s agricultural sector battles a severe drought linked to the El Niño weather phenomenon.

## What Happened

The loan, signed during an event at the Biomuseo in Panama City, will channel funds through the Banco Nacional de Panamá to support some 3,300 small and medium-sized enterprises, with particular emphasis on businesses led by women. At least half of the resources will finance agricultural and agro-industrial activities, mainly in rural areas, according to an official statement.

“It is the largest loan CAF has made in its history in Panama to a bank. It is a major operation aimed at supporting: half of this credit to agribusiness and agroindustry, and the other half to small and medium enterprises,” CAF Executive President Sergio Díaz-Granados told EFE.

The funds will also finance green projects tied to energy efficiency, renewable energy, and sustainability, according to official information.

Díaz-Granados said the timing of the credit is critical. “I think it comes at a very important moment to prepare rural businesses in Panama. We have the warning of the El Niño phenomenon above us, and I believe we need to prepare, by any means, for the water stress this phenomenon could bring. This credit line can be very useful in that process,” he said.

## Background

Panama is grappling this year with a drought associated with El Niño, prompting authorities to declare a state of emergency amid projections of rainfall drops of up to 55 percent, rising temperatures toward the end of the year, and conditions that could persist into early 2027.

El Niño is a cyclical meteorological phenomenon that warms Pacific Ocean waters and disrupts climate patterns worldwide. In Panama, it is straining water resources and agriculture and is expected to affect hydroelectric power generation.

The effects are already being felt at the Panama Canal, a cornerstone of the national economy. Lower lake levels feeding the waterway have forced authorities to reduce the number of ships allowed to transit daily, as well as to limit vessel draft — the submerged portion of a ship.

Rural communities carry significant weight in Panama’s demographics: roughly one third of the country’s population lives in rural areas, above the regional average, according to a report presented at the signing ceremony.

## What This Means for Panama

The record-sized loan signals a major injection of financing into two of the country’s most vulnerable economic segments: rural agribusiness and small and medium enterprises, including women-led firms that often face barriers to credit access.

With agriculture under direct pressure from drought conditions, the earmarking of at least half the funds for agricultural and agro-industrial activity in rural areas could help producers adapt to water stress and maintain output through a difficult cycle.

The inclusion of green financing for energy efficiency and renewables also aligns the credit with sustainability goals at a time when hydropower generation is expected to suffer from reduced rainfall.

The operation comes at a sensitive moment for the broader economy. The Panama Canal’s transit and draft restrictions show how El Niño’s effects extend beyond farming into the logistics backbone that drives national revenue, underscoring why multilateral support for climate resilience is arriving now.

For observers, the key developments to watch will be how quickly Banco Nacional channels the funds to the 3,300 targeted businesses, how effectively the agricultural financing mitigates drought losses, and whether additional multilateral support follows as El Niño conditions potentially extend into 2027.

This story was originally reported by [La Prensa](https://www.prensa.com/economia/caf-concede-prestamo-de-500-millones-de-dolares-a-panama-para-el-sector-agricola/).