El Salvador Plant to offer crypto loans for small business owners-Emerging Markets

The government of El Salvador will offer small companies on cryptocurrencies based on cryptocurrencies. Conamype, the National Commission for Micro and Small Enterprises, will be the connection between the investors and a decentralized financial protocol called ACUMEN, which will be able to finance stable coins. The aim is to help small investors without credit history in the country.

Small companies in El Salvador receive cryptocurrency-based loans

Small companies in El Salvador can receive funds to operate their companies with cryptocurrency. The program is aimed at owners of small companies that have no access to traditional financing instruments. The loans are offered via Conamype, the national commission for small and small companies, that plans to offer these loans to their registered members.

The announcement was made by Paul Steiner, President of Conamype, and Mónica Taher, responsible for Tech & Economic International Affairs, during a Facebook conversation Strom on January 19. The organization will provide these companies through ACUMEN, a decentralized financial protocol based on Solana, funds of $ 10 million. The details of the deal are still being worked out, but the volatility is to be minimized by granting acumen the loans in dollar-bound tokens, such as z Usdt USDC, and borrowers who pay back the loans in dollars.

Current situation of the credit market

In order to emphasize the importance of these loans in view of what is opposed to small and medium -sized companies in the country in order to maintain financing, Steiner explained that most small companies are still not part of the country's traditional financial system. He indicated:

There is credit sharks that demand between 20 % and 25 % per month. We want to avoid that.

According to Steiner, this is because more than 80 percent of small businesses in El Salvador have no bank account. In order to receive these loans, however, companies would not have to submit to the same requirements as banks, thanks to the introduction of the Bitcoin law in the country.

Steiner also spoke about the annual interest rates for the loans and explained that depending on the risk of each analyzed project, they are the lowest on the market - all the more if the only way is to rent money from credit sharks.

What do you think of the cryptocurrency -based loans that El Salvador is ready to forgive? Tell us in the comment area below.

Sergio Göschenko

sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late in the game and entered the cryptosphere when the price increase took place in December 2017. He has a background as a computer engineer, lives in Venezuela and is affected by the cryptocurrency boom on a social level. It offers a different perspective on the crypto success and how it helps those who have no bank account and are under-supplied.

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