Your Gate to Latin American IP

El Salvador will boost credit for micro and small businesses with IDB support

By Portal & Asociados - 05/03/2020
El Salvador will boost credit for micro and small businesses with IDB support

El Salvador will boost the economic activity of micro and small businesses (MSEs) with the support of a U$S 20 million financing approved by the Inter-American Development Bank (IDB) that will provide access to credit under better term conditions.

The program expects to benefit a total of 2,000 MSEs, of which at least 400 are headed or owned by women and 400 more are located in highly marginalized municipalities. It will be executed by the Banco de Fomento Agropecuario de El Salvador (BFA) and will focus on investment productive projects. Natural and legal persons considered as venture and MSEs borrowers from all economic sectors except coffee, previously covered by other operations, will be able to access credit resources.

On the one hand, the focus in highly marginalized municipalities takes advantage of the BFA´s distribution network of 32 branches, 8 express tellers, and 5 banking correspondents, reaching unattended areas and exercising a catalytic role of productive credit. On the other, the operation seeks to grant loans to women in rural areas, which represent 51.3 percent of the population and require access to financial services.

The resources may be used to finance investments through direct sub-loans in activities that include, but are not limited to the acquisition of inputs, technology, infrastructure, irrigation, equipment, transportation, storage, bulking, and any other purpose related to improving and increasing the scale of the economic activity in the country.

The program is of importance since MSEs have a tremendous impact on economic activity in El Salvador. According to figures from the Superintendency of Competition, they represent 35 percent of the national GDP, 99.3 percent of all businesses and are responsible for generating 67.6 percent of the country's employment.

The IDB loan has a repayment term of 25 years, a grace period of five and a half years, an interest rate based on LIBOR.

By Portal & Asociados - 05/03/2020
Subscribe to the Newsletter

Portal & Asociados

For over thirty years, PORTAL & ASOCIADOS has been recognized as a Salvadoran law firm synonymous of high quality, integrity and value by leading domestic and multinational corporations and law firms seeking to invest or expand operations in El Salvador and Central America. We provide intellectual property services with a high level of professionalism no matter the size or nature of the operations of our clients.

The firm provides Intellectual Property services to businesses of all sizes, across all industry segments. Our multidisciplinary approach and multilingual staff appeal to inside and outside counsel who need a cooperative, responsive and cost conscious legal team on the ground to represent their clients’ interest in the Salvadoran and Central American region. Portal & Asociados also stands at the forefront of CAFTA related opportunities assisting manufacturers and companies to take full advantage of CAFTA market opening provisions by helping clients navigate the important reforms of domestic legal and business environments.

Because it is so time consuming and therefore expensive to establish and maintain relationships with five different law firms located and operating within a small geographical region, the firm´s Central American services consolidates clients’ efforts and offers one point of contact for all legal needs in Guatemala, Honduras, El Salvador, Costa Rica and Nicaragua and that is why we are your CENTRAL AMERICAN HUB FOR INTELLECTUAL PROPERTY SERVICES.