The World Bank Group has approved new financing to support El Salvador in expanding access to credit for micro, small, and medium enterprises (MSMEs), with the objective of strengthening job creation and promoting inclusive economic growth. MSMEs play a critical role in the country’s economy, serving as a key driver of employment and business activity, and the initiative aims to enhance their capacity to grow, formalize, and contribute more effectively to national development.
The project focuses on improving financial access for businesses operating in sectors with strong job creation potential, such as tourism. By enabling MSMEs to secure longer-term financing, the initiative seeks to unlock new opportunities for expansion and productivity. It is expected that around 5,000 enterprises will benefit from improved access to loans, leading to the creation or improvement of approximately 8,300 jobs, including a significant share for women.
A central component of the program is the strengthening of financial intermediation through a dedicated line of credit, which will be implemented by the Development Bank of El Salvador (BANDESAL). In addition, a partial credit guarantee mechanism will be introduced to reduce lending risks and encourage financial institutions to extend more credit to MSMEs. These measures are designed to improve integration into global value chains and enhance business competitiveness.
The initiative also aims to mobilize additional private sector investment, building on the efforts of the International Finance Corporation to promote financial inclusion and support productive expansion. By combining public and private financing mechanisms, the project creates a more robust ecosystem for business growth and employment generation.
With a total financing of $100 million provided by the International Bank for Reconstruction and Development, the project will be implemented over a five-year period. Overall, the initiative reflects a comprehensive strategy to strengthen the MSME sector, expand access to finance, and drive sustainable economic development in El Salvador.
