The Inter-American Development Bank (IDB) has approved a loan for El Salvador for a total amount of 100 million dollars (92.3 million euros) to support the growth of micro, small and medium-sized companies in the country, in line with strengthening its productive fabric.
As explained by the bank in a statement, these funds will finance lines of credit from the Development Bank of the Republic of El Salvador (Bandesal) in order to promote the expansion of access to medium- and long-term productive credit for Salvadoran SMEs.
The promotion of this type of loan will help companies in El Salvador access formal lines of credit, something common only among 29 % of SMEs in the country. Specifically, according to data from the Salvadoran Banking Association, 99 % of the microenterprises in the Central American country, particularly those dedicated to commerce, regularly access informal loans under bribery financial conditions.
This loan is the third individual operation under the Conditional Credit Line for Investment Projects (Cclip) for access to business and housing credit in El Salvador.
The first operation was approved in July 2020 for 400 million dollars (369 million euros) to promote productive activity and social welfare in the Central American country. This third loan has a 25-year repayment term and a grace period of five and a half years.
“This operation is expected to increase the income from sales and employment of the beneficiary SMEs, generating effects on the female business fabric, since 30 % of the funds are focused on companies led or owned by women,” they explained. from the IDB.
(Reference image source: dpa, Europa Press)