The funds will finance lines of credit from Banco de Desarrollo de la República de El Salvador (BANDESAL) for intermediary financial institutions, known as second-tier lines, to promote the expansion of access to medium- and long-term productive credit for salvadoran MSMEs.

This loan is the third individual operation under the Línea de Crédito Condicional para Proyectos de Inversión (CCLIP)for access to business and housing credit in El Salvador. This CCLIP was approved and has been under implementation since july 2020 for $400 million to promote productive activity and social welfare in the Central American country.

This operation is expected to increase the sales revenues and employment of the beneficiary MSMEs and generate positive effects on the female business fabric, as 30% of the funds will be focused on MSMEs led or owned by women.

According to data from the Asociación Bancaria Salvadoreña, 99% of microenterprises in the Central American country, particularly those engaged in commerce, regularly access informal loans under usurious financial conditions. The 2019 National Survey on Access to Financing for MSMEs revealed that only 29% of the country's MSMEs have formal lines of credit or loans.

This third loan operation for US$100 million has an amortization term of 25 years, a grace period of five and a half years, and an interest rate based on SOFR.

Translated by: A.M