FINANCING THE FARM

Panama 2014 | FINANCE | INTERVIEW

TBY talks to Rolando J. de León de Alba, General Manager of Banco Nacional de Panamá, on stimulating agricultural development and home ownership through low interest loans, and attracting foreign investment.

Rolando J. de León de Alba
BIOGRAPHY
Rolando J. de León de Alba studied international relations with a focus on economics at Florida State University, and also has an MA in business administration from the Universidad Interamericana de Panamá. His work experience began in 1980 at the Bank of America NT & SA, where he held diverse positions in the area of treasury and financial analysis in Panama City, Miami, and San Francisco. In 1992 he became Executive Director of Finance at the Banco Nacional de Panamá, and following a four-year position at Chase Manhattan Bank from 1994, has been working there since. He has also served as the Panamanian representative on the Central American Monetary Council and the American Chamber of Commerce, among many other key roles.

What are your main priorities for the next five years for the Banco Nacional de Panamá?

Our strategy has been focused mainly on the agricultural sector. Banco Nacional is the financial arm that the main producers can use to promote their products, especially those that belong to the basic food basket. Besides that, Banco Nacional wants to be the main financer for rural housing because Panama needs to provide 140,000 homes for medium- and low-income families. Our third goal is that we want to make Banco Nacional an institution that has a strong position in terms of technology, especially in payment systems. Banco Nacional is working right now to develop modern technologies, including biotechnology, to allow the government to reach the people directly. We are in the best position to do that since we changed our core system back in 2012.

What are the specific measures that you intend to take to increase production and to boost the agricultural sector?

We need to send a message that the main producers in Panama can use their land to get new sources of production. What this means is if someone wants to take production to the next level, Banco Nacional, in agreement with the government, is able to provide finance at 0% if it is a new project. This scheme is not for refinancing or buying new land; it is only for new projects. We are offering this financing from 2013 until 2016 and calling for all the major producers in the countryside to take advantage of this 0% interest rate, which is most favorable for them. However, we have to bear in mind that Banco Nacional is not a development bank and we have to follow the relevant policies and rules because we are supervised by the same Superintendency as the rest of the banks. The main goal is to increase production because currently Panama relies on imports. For example, we are dairy producers, but we need 35,000 more cows to satisfy the demand for milk in the country. Previously, we were able to meet the demand; however, the agricultural sector has been decreasing over the years because we have focused more on the service sector. We need to catch up with the agricultural sector. We need to produce in agreement with GDP. Currently, agriculture only represents around 3% of GDP, whereas it used to be 9% only 15 years ago. We need to reverse that trend.

What is the role of the international banking sector in attracting foreign investment to the country?

When we achieved the $100 billion mark, I got a call from a journalist about it and I told him that in 1983 the banking sector achieved $52 billion in assets, which at the time was a big thing. At that point there were more than 100 banks from around the world in Panama. Then there was a financial crisis, banks started leaving Panama, and the total assets started decreasing. We had to wait until after the invasion in 1989 to get the system back on track. Now we are facing a trend that whilst Panama has all the resources needed to attract international banks, those banks are leaving the country. Panama has been put on a gray list by the IMF, and that is something we need to address. In the future, we will not be able to attract any other international banks to come here and do business. Our main goal is to get off that gray list and get back on track. We need to tell the international banks that this is a great place to do business, not only locally but also regionally.