El Salvador to Provide Crypto-Based Loans

by in Cryptocurrency News

El Salvador Bitcoin loans

El Salvador continues to increase Bitcoin’s role in the country’s economics.

Related: Moody's criticizes El Salvador for bitcoin legalization

Currently, the government considers offering small and medium businesses $10 M in crypto-backed loans. The program will start in the first quarter of this year.

Director at Technological Economic International Affairs at the El Salvador Government, Mónica Taher announced in a live presentation that the project aims to support the growth of small and medium businesses offering them an alternative to banks. In a later tweet, Taher said that Salvadorian banking provides services to 33.000 small businesses that have business accounts.

However, a large number of small businesses, about 1.2 M of them, don't have access to the bank account.

Crypto loans will be an effective solution for them, and businesses can borrow Bitcoin loans.

Lending and borrowing market Acumen built on the Solana blockchain will provide USD funding to the National Commission for Micro and Small Enterprises. Acumen is a non-custodial interest rate protocol based on algorithms and sets interest rates to power open financial apps.

Lately, president Nayib Bukele announced that the number of the Bitcoin Wallet Chivo reached 4 M, which is 70% of the unbanked population.