Banhprovi Initiates the Path towards Sustainable Development Banking in Honduras
Updated: Jun 16, 2020
Local development banking plays a fundamental role in Latin American countries. Banking can act as a financial vehicle for various development purposes and can help to establish a more direct relationship between the public and private sectors. Banhprovi (Banco Hondureño de la Producción y la Vivienda) in the Republic of Honduras has been no exception, mainly supporting the micro and small and medium enterprises, housing and agricultural sectors both through first floor (direct) products and financial intermediation (second floor) where it currently interacts with more than 70 financial institutions. In addition, the bank provides trust management services through an expanded portfolio of customers and services.
Since 2019, with the support of the UN-REDD Programme, Banhprovi has begun a diagnostic process to evaluate its operation against the sustainability benchmarks applied in the financial sector, in order to determine the fundamental environmental and social issues that should be part of its business. This analysis resulted in identifying and defining steps to be followed by the bank over the long-term, including an environmental and social risk system, the development of an eco-efficiency program and the development of green products and services. The adoption of these systems will also facilitate the alignment with climate and deforestation reduction objectives in the country, in addition to contributing to the Sustainable Development Goals.
The UN-REDD team and Banhprovi staff, led by Executive President Mayra Falck, coordinated the formulation of the Bank's Environmental and Social Policy document, integrating the bank's aspirations and establishing a framework intended to transform the way business is done. This policy was approved at the end of March and shared and explained with most of the staff in April, using online technology in this time of preventive isolation.
The UN-REDD Programme has extended its support to develop the environmental and social risk management system (SARAS) during 2020. This will help Banhprovi become the first Honduran entity to be accredited to the Green Climate Fund which will, in turn, channel resources directly to climate change mitigation and adaptation projects that are a priority in a country categorized as one of the most vulnerable in the region.
Working with different organizations in the financial sector is fundamental for the UN-REDD Programme in its mission to ensure that its operations are increasingly aligned with international commitments and national needs to avoid deforestation, protect biodiversity, conserve forests, sequester carbon and adapt environments through nature-based solutions. At the same time the actions are in alignment with the SDGs and the long-term goals developed at the global level.
Spanish version here.
Bank clients, loan beneficiaries, selecting coffee
Juan Camilo Barreneche
Land Use and REDD+ Economics and Finance Consultant for Latin America