President Nayib Bukele, often known as the “CEO of El Salvador,” is now working on a credit product based on bitcoin Loans. This would be aimed at small and medium-sized businesses across the country.
On Facebook, Monica Taher, an adviser to the Salvadoran government, indicated that the next step in El Salvador’s cryptocurrency initiative would be to generate lower-interest loans for small enterprises.
People without a bank account will be able to obtain digital currency through low-cost bitcoin loans, which will also help them build credit. She predicted that El Salvador’s economy would improve by encouraging small businesses.
According to Paul Steiner, president of CONAMYPE (a state institute for small and micro-businesses), the financing programme would be based on the Chivo project, which has had 4 million users in less than four months.
Furthermore, El Salvador is dominated by small and microbusinesses, and it is possible to change that with bitcoin-backed loans.
Approximately 1.2 million businesses operate in El Salvador. Micro and small enterprises account for around 66 per cent of the total. In fact, according to Steiner, more than 90 per cent of micro-enterprises self-finance through informal loans or money lenders.
Approximately 1.2 million businesses operate in El Salvador. Micro and small enterprises account for around 66 per cent of the total. In fact, according to Steiner, more than 90 per cent of micro-enterprises self-finance through informal loans or money lenders.
As he went on to explain, usurers frequently charge borrowers up to $ 15 a day in interest on a $100 loan that must be repaid in 20 days or less. Bitcoin-based lending may be able to help those who such groups have harmed.
Andrea Mara Gómez,project manager at Acumen,a decentralized financial lending (DeFi) system, stated that “some cryptocurrency enthusiasts in El Salvador are already using cryptocurrency solutions like DeFi because they offer ease of use and better interest rates than at a bank.”
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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