El Salvador continues to unveil new ways to integrate Bitcoin (BTC) into its economy. The government has confirmed plans to offer low-interest loans in BTC for small and micro businesses in the country.
Bitcoin loans for small businesses in El Salvador
The announcement was made by Mónica Taher, the government’s director of technology and international economic affairs. She explained in a Facebook broadcast that El Salvador plans to offer these loans to businesses, in order to foster their growth while making use of Bitcoin.
This will have a virtuous effect on El Salvador’s economy, according to Taher:
Bitcoin loans will provide access to digital currency for the unbanked, while helping them create a credit history. El Salvador’s economy will be strengthened by helping its small businesses. “
Loans directly from the Chivo portfolio
The Chivo wallet, which was proposed by the government following the adoption of Bitcoin as a legal tender, will be the chosen application for these loans. It is widely used in El Salvador: 4 million of the country’s 6.5 million people use it. That’s a considerable share, given that people under 18 don’t have access to it.
4 million users!
*Total population: 6.5 million (including people under 18 that are still not allowed to use the app).
We have the receiptsBTC https://t.co/y3jvEdOtex
– Nayib Bukele (@nayibbukele) January 19, 2022
The digital wallet, which can operate without mobile data, has a clear advantage for the population of El Salvador, as 66% of the country’s businesses are considered “micro” or even subsistence enterprises.
Access to bank accounts is also a problem faced by many business owners. To obtain financing, they often have to turn to services that charge particularly high interest rates.
It is not known when this new Bitcoin lending service for businesses in El Salvador will be rolled out. But the announcement shows that the country intends to continue using cryptocurrency in all areas.
