The United States Agency for International Development and financial institutions in Costa Rica: Private banks for development or the development of private banks?

This work evaluates the importance of USAID economic assistance in the emergence of private banks in Costa Rica during the 1980s, and identifies the type of national development these banks favored through their lending policies. The amount of USAID aid directed to these private financial institutions were compared to the value of their assets and the orientation of their credit, and the performance of Costa Rican exports were analyzed. By 1989, USAID aid to private banks represented half of their assets; in turn, their credit heavily concentrated in industrial and commercial economic activities. This evidence, together with the rise of non-traditional industrial exports, indicates that the USAID has played a very important role in the formation of this group of Costa Rican banks which, in turn, favored the promotion of an export-led strategy of national development.