El Salvador Plans to Offer Crypto Loans to Small-Scale Entrepreneurs – Emerging Markets Bitcoin News

Small businesses will be able to get cryptocurrency-based loans from the government of El Salvador. Conamype will serve as the liaison between investors and Acumen (a decentralized finance protocol) that is able to offer funding in stablecoins. This is to assist small investors who have not had credit histories in this country.

Cryptocurrency Loans for Small Businesses in El Salvador

Funding will be available for small businesses in El Salvador to enable them to use cryptocurrency to power their operations. This program will be available to small business owners who do not have access to traditional financing tools. Conamype (the National Commission for Micro and Small Enterprises) will offer the loans.

The announcement was made by Paul Steiner, President of Conamype, and Mónica Taher, in charge of Tech & Economic International Affairs, during a Facebook stream on January 19. This organization will fund these businesses with $10 million through Acumen, which is a decentralized finance protocol built on Solana. Details of the deal remain to be finalized. However, volatility will be reduced by Acumen lending the funds in dollar-pegged tokens such as USDT or USDC and the borrowers repaying them in dollars.

Present State of the Lending Industry

Steiner stated that small and medium-sized companies face many challenges when trying to get financing. He added:

Lender sharks can charge between 20 and 25 percent per month. We want to avoid this.

Steiner says this happens because more than 80 percent of small businesses in El Salvador don’t have a bank account. The introduction of bitcoin laws in El Salvador means that companies will not need to comply with the same regulations as those who apply for loans to banks.

Steiner also talked about the annual interest rates for the loans, stating that they would be the lowest in the market depending on the risk of each analyzed project — more so if the only choice is to borrow money from loan sharks.

How do you feel about El Salvador’s plans to offer cryptocurrency-based loans? Comment below.

Sergio Goschenko

Sergio is a Venezuelan cryptocurrency journalist. Sergio is a cryptocurrency journalist based in Venezuela. He says he was late to the party, having entered the cryptosphere during the December 2017 price increase. His background is in computer engineering, but he also lives in Venezuela and was impacted at the social level by the crypto boom. He offers an alternative perspective on the success of cryptocurrency and the benefits it has for the underbanked.

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