The El Salvador government plans to extend crypto-backed loans to small and medium-sized businesses in the country before the end of the first quarter of this year.
Process required for loan processing, government agency responsible for providing financing to entrepreneurs in El Salvador National Commission for Micro and Small Business (Conamype) will be run by.
Speaking to CoinDesk, Conamype’s president, Paul Steiner, said he wanted to offer credit support to small and medium-sized businesses. Solana blockchain announced that they will benefit from the lending platform called Acumen.
According to the information shared by Steiner, 86 percent of companies in El Salvador operate on an informal level and today from banking services cannot take advantage. These companies 20 percent per month, such as 25 percent While it is dependent on usurers who issue loans at interest, the government believes that this problem can be solved with crypto-backed loans.
As part of the solution work, the El Salvador government, which has been in talks with the Acumen team since October 2021, will provide SMEs in total if the agreement is implemented. worth $200 million He thinks he can get a loan.
In the light of the negotiations, Acumen’s conversion of the cryptocurrencies shown as collateral into stablecoins such as USDC, USDT, to Conamype. sending US dollars, these dollars are planned to be transferred to SMEs through a state bank.
According to the statements of a name from the Acumen team, the annual interest rate of the loans to be given will vary between 6 percent and 7 percent on average and can reach up to 10 percent.
Businesses that receive loans in this way will pay their debts to the government in US dollars, and the government will forward these payments to Acumen.
negotiations between the parties while continuingAn agreement is expected to be reached in the first quarter of this year.