Sunday, June 23, 2024

El Salvador intends to provide small-scale entrepreneurs with cryptocurrency loans

Financial institutes have struggled to roll out loans in the aftermath of the Covid-19 pandemic. Different governments have adopted different strategies to combat this problem. Among different countries, El Salvador is taking a unique approach to solving this problem. As with its economic system, El Salvador is rolling out cryptocurrency loans to small businesses in the country. Under this new scheme, the National Commission for Micro and Small Enterprises will give loans to small and medium businesses. Even business owners without any credit history will have the ability to use this facility. Paul Steiner and Monica Tahar from the National Commission for Micro and Small Enterprises announced the same in a Facebook live stream. The total pool for the loan will be $10 million in the beginning and will increase with time. Steiner added that the interest rates for these loans will be unmatched.

Despite big claims around this initiative, there is no clarity around how these loans will be provided. The problem of fluctuating crypto prices has not been addressed either. The National Commission for Micro and Small Enterprises will provide loans in stablecoins to minimize fluctuations, but that is not a fool-proof solution either.

If El Salvador manages to achieve this feat, it will be the first and only country to offer loans in cryptocurrency. Depending on the success of this scheme, El Salvador can embark on similar programs in the future. In the long term, crypto exchanges also have a chance to succeed in this new market.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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