The authorities of El Salvador are going to issue loans to businesses secured by bitcoin

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The government of El Salvador has offered small and medium-sized businesses a new loan product – government loans, which can be secured by bitcoin.

The product was presented by El Salvador government adviser Monica Taher at a Facebook Live Audio conference. Government loans were presented to the audience as “Bitcoin loans with lower interest rates.”

Paul Steiner, President of the National Institute of Small and Medium Enterprises of El Salvador (CONAMYPE), said that loans secured by bitcoin will be issued using the El Chivo digital wallet created by the government.

There are about 1.2 million private companies in El Salvador, and about 66% of them are small businesses. Almost all of them turn to private banks or small moneylenders to stay afloat, Steiner laments. Annual rates on some loans from commercial banks can reach 10,000%. In such a situation, government lending supported by cryptocurrency is designed to reduce the percentage per annum and enable entrepreneurs to develop calmly:

“Businesses need an accurate starting point for funding, and bitcoin can provide it.”

One of the speakers at the presentation was the community manager of the Canadian crypto company Ledn Alessandro Cesere. His company recently made it possible for its customers to take out mortgages backed by bitcoin. Cecere wondered if El Salvador could follow suit and consider bitcoin as collateral for mortgages.

The CONAMYPE President replied that he was open to any proposals, but emphasized that improving the conditions for small and medium-sized businesses remains a priority. The government adviser promised to return to the discussion of mortgage loans in the future.

Recall that recently the Ministry of Finance of El Salvador submitted bills to the Parliament that should ensure the legitimacy of Volcano Bonds bitcoin bonds.

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