Panama has borrowed US$330 million in loan from Latin American development bank, CAF, for financing its massive ICT program designed to bring about digital transformation in all economic sectors.
The Central American country is hoping to become what it calls a “digital infrastructure hub” and has already launched initiatives to build 5G networks and enact laws to regulate financial technology (fintech) and cybercrime.
A significant sum of money will also be spent on expanding internet coverage to rural areas, according to a statement from the lender.
“At CAF we promote the digitalization of the state and the productive sector to improve efficiency, boost competitiveness and improve equality in Panama and Latin America, through digital inclusion and the development of high-quality digital infrastructure,” said CAF executive president Luis Carranza Ugarte.
Panama was once a global financial hub, but in recent years many international banks are exiting the country. Therefore, it has now begun focusing on financial technology.
The new fintech law will pave the way for open banking, in addition to promoting digital banking services.
Telecom services are not cheap in Panama, although dozens of submarine cables run through the country. The expensive telecom industry has long been hindering the country’s effort to provide e-government services.