INCREASED FINANCING SERVICES FOR SMALL AND MEDIUM ENTERPRISES GROWTH

SAN SALVADOR–The U.S. International Development Finance Corporation (DFC), with support from the United States Agency for International Development (USAID) has joined with four Central American banks, Banco Azul of El Salvador, BAC Credomatic, Banco GyT Continental, and Banco Promerica, to offer financing services to Salvadoran small and medium enterprises (SMEs).  Through agreements between the DFC and the partner banks, new or increased loans will be made available for SME clients to help them address the economic challenges posed by the COVID-19 pandemic.

With modifications to the agreements, the four banks will have a little over $24 million in additional financing available for productive activities of the SMEs, impacted by COVID-19.  The implementation of the agreements will be in accordance with each bank's established loan criteria.

For the last 20 years, USAID has worked hand in hand with various banks to expand access to financing for SMEs through loan guarantees to promote economic growth in El Salvador.  These loans have helped economic sectors that in many cases have had limited access to financing.  From 2011-2020, USAID has made over $100 million available for loans to more than 1,200 Salvadoran enterprises.

In 2017 and 2018, USAID through the Development Credit Authority, which now forms part of the DFC, established an alliance with four local banks to back up loans to SMEs, thereby facilitating greater access to credit for diverse SMEs in productive sectors, including exports, imports, tourism, renewable energy, and others.  The loans that will be generated under the new agreements will form part of DFC’s portfolio.

During these times of economic changes, due to the pandemic, partner banks are looking for creative ways to provide support to SMEs.