El Salvador Plans to Offer Crypto-Based Loans for SMEs

The government will launch a first line of $10 million provided by the Solana-based lending platform Acumen in the first quarter of 2022.

AccessTimeIconJan 21, 2022 at 6:34 a.m. UTC
Updated May 11, 2023 at 4:03 p.m. UTC

The government of El Salvador plans to offer small and medium-sized companies (SME) $10 million in crypto-based loans as of the first quarter of 2022.

Acumen, a Solana-based lending and borrowing platform, will provide U.S. dollar funding to El Salvador's National Commission for Micro and Small Enterprises (Conamype), a government entity that plans to allocate financing to local informal entrepreneurs and self-employed workers, Conamype's president, Paul Steiner, told CoinDesk.

Acumen's loans will have an annual interest rate of 6% to 7%, although it could reach up to 10%, Acumen's project manager, Andrea Gómez, told CoinDesk.

According to Steiner, 86% of the companies in El Salvador operate in the informal sector and do not have access to banking services. Of that percentage, 98% rely on unregistered lenders offering loans at annual interest rates of 2,300%, on average, he added.

"They are loan sharks charging between 20% and 25% per month. That is what we want to avoid," Steiner said.

According to Steiner, the government has been in talks with Acumen since October 2021, following the approval of bitcoin as legal tender in the Central American country. In parallel, it holds negotiations with different crypto lending platforms looking to provide loans to Salvadoran SMEs, Steiner said, adding that, if signed, the agreements could total $200 million.

Acumen will convert crypto to stablecoins – USDC or tether – and send U.S. dollars to Conamype, which plans to deliver U.S. dollars to Salvadoran SMEs and entrepreneurs through the state-owned bank Banco Hipotecario, Steiner said.

Conversely, Salvadorans will pay capital and interests in U.S. dollars and the government will return U.S. dollars to Acumen, Steiner said.

El Salvador's government and Acumen are still defining details of the agreement, said Gomez, who added that the product will be ready in the first quarter of the year.

According to Gomez, Acumen currently has 15,000 users and was authorized as a lender by the Central Bank of El Salvador in November 2021.


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Andrés Engler is a CoinDesk editor based in Argentina, where he covers the Latin American crypto ecosystem. He holds BTC and ETH.

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