{"id":396626,"date":"2022-01-20T13:43:46","date_gmt":"2022-01-20T10:43:46","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/el-salvador-explores-low-interest-loans-backed-by-bitcoin\/"},"modified":"2022-01-20T13:43:46","modified_gmt":"2022-01-20T10:43:46","slug":"el-salvador-explores-low-interest-loans-backed-by-bitcoin","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/el-salvador-explores-low-interest-loans-backed-by-bitcoin\/","title":{"rendered":"# El Salvador explores low-interest loans backed by Bitcoin"},"content":{"rendered":"

“# El Salvador explores low-interest loans backed by Bitcoin <\/strong>”
\n<\/p>\n

It\u2019s full steam ahead for El Salvador\u2019s Bitcoinization. The next point on the orange agenda is in providing low-interest loans backed by Bitcoin (BTC) to small and micro-businesses.<\/p>\n

While the details of the BTC loans are currently not disclosed, M\u00f3nica Taher, an advisor for the government of El Salvador, was straight-talking in a Facebook<\/a> Live Audio held<\/a> yesterday. The discussion was called \u201cBitcoin loans with lower interest rates.\u201d <\/p>\n

Paul Steiner the President of CONAMYPE (the national institute for small and micro-businesses) shared that the implementation of loans would work with the government-created El Chivo wallet.<\/p>\n

El Salvador’s business landscape is dominated by small and micro-businesses and Bitcoin-backed loans are an opportunity to remediate the situation. Steiner illustrated: <\/p>\n

El Salvador has roughly 1.2 million businesses in the country. Roughly 66% are micro-businesses or \u201csubsistence\u201d businesses. Over 90% of micro-businesses are self-funded via informal loans or loan sharks.<\/p><\/blockquote>\n

He cites the example that a $100 loan taken out by a micro-business will typically come with terms of full repayment in 20 days while the interest rate could be up to $15 a day. In some cases, the annual interest rate for such loans \u201cexceeds 10,000%.\u201d\u00a0<\/p>\n

Ultimately, the interest rate provided by BTC-backed loans would be lower than that of informal lenders, loan sharks, and banks. <\/p>\n

Andrea Martia Gomez, a project manager for Acumen<\/a>, a DeFi lending protocol shared that \u201csome crypto enthusiasts in El Salvador are already using crypto solutions such as Defi as they offer an ease of use and a higher interest rate than banks.\u201d<\/p>\n

Related: <\/em><\/strong>El Salvador\u2019s Bitcoin wallet onboards 4M users with Netki partnership<\/em><\/strong><\/p>\n

Alessandro Cecere, Community Manager for Ledn, a Canadian Bitcoin company also participated in the discussion. Ledn recently launched BTC-backed mortgages. He asked if El Salvador might copy their example and if Bitcoin might be considered as collateral for mortgages in the future. <\/p>\n

Steiner was open to the discussion and optimistic about the future of Bitcoin. However, his priority is to improve the business environment for SMEs. When prompted in the chatbox about loans for other avenues or housing, M\u00f3nica Taher reiterated that the loan product would only be available to small and micro businesses for the moment, \u201cwe will discuss mortgages later.\u201d<\/p>\n

Steiner summed up the vision when referring to the challenges that micro-businesses face in El Salvador:<\/p>\n

Businesses need an entry point for financing: Bitcoin is that opportunity.<\/p><\/blockquote>\n