[ad_1]
The Bitcoinization of El Salvador is in full swing. The next point on the Orange Agenda is to provide low-interest loans backed by Bitcoin (bitcoin) for small and micro businesses.
While details of the BTC loan have not been disclosed yet, El Salvador government advisor Mónica Taher was blunt in Facebook Live Audio hold yesterday. The discussion is called “low-interest bitcoin loans.”
Paul Steiner, chairman of CONAMYPE (National Institute of Small and Micro Enterprises), shared that the implementation of the loan will El Chivo wallet created by the government.
El Salvador’s business landscape is dominated by small and micro businesses, and bitcoin-backed loans are an opportunity to rectify that. Steiner diagram:
El Salvador has approximately 1.2 million businesses in the country. About 66% are micro-enterprises or “subsistence” businesses. Over 90% of microenterprises are self-financing through informal loans or loan sharks.
He gave the example of a $100 loan from a micro business that is typically repaid in full within 20 days, and the interest rate can be as high as $15 a day. In some cases, the annual interest rate on such loans is “over 10,000%”.
Ultimately, BTC-backed loans will offer lower interest rates than informal lenders, loan sharks, and banks.
Andrea Martia Gomez, Project Manager keena DeFi lending protocol shared: “Some crypto enthusiasts in El Salvador are already using crypto solutions like Defi as they offer greater ease of use and higher interest rates than banks.”
related: El Salvador’s Bitcoin Wallet Hits 4 Million Users in Partnership with Netki
Alessandro Cecere, community manager at Canadian bitcoin company Ledn, also joined the discussion. Ledn recently launched BTC-backed mortgages. He asked if El Salvador could replicate their example and if Bitcoin could be used as collateral in the future.
Steiner is open to discussions and optimistic about Bitcoin’s future. However, his priority is to improve the business environment for SMEs. When prompted in the chat box about loans for other avenues or housing, Monica Taher reiterated that the loan product is currently only available for small and micro businesses, “We’ll discuss mortgages later.”
Speaking about the challenges facing micro-enterprises in El Salvador, Steiner summed up this vision:
Businesses need a financing entry point: Bitcoin is that opportunity.
[ad_2]
Source link
