According to data from the International Labor Organization (ILO), there are approximately 1.2 million people in forced labor in Latin America and the Caribbean. It is also estimated that the value of child labor linked to direct and indirect export goods and services for LAC still stands at 22%.

The contribution of child labor to exports in this same region rises to 40%. In South America, it is estimated that exports represent 15.4% of total employment.

There are a variety of cases of environmental and social effects of these operations, linked not only to those mentioned above, but also to irreversible impacts such as water and soil contamination, massive deforestation, forced evictions, impact on livelihoods, fair and adequate compensation.

These negative effects are generated on populations and the environment.

Development banking is necessary to promote public and private sector investment, and even more so to face the financial crisis generated by COVID-19, since it represents a growth opportunity for countries in economic and social development.

The financial risks of granting credit through financial intermediation operations become even more complex precisely because of the intervention of intermediaries, over which there is an information gap with respect to subprojects and final borrowers, as well as monitoring and control of the execution of these investments.

Due diligence, restrictions on projects to be financed for subborrowers and monitoring of subprojects is key to eliminate risks and work on the impacts that may have been caused.

Translated by: A.M