With US$600 million in financing, the largest approved in the history of the Central American Bank for Economic Integration (CABEI), the multilateral institution will support the Republic of El Salvador in its economic recovery after the crisis caused by the COVID-19 pandemic.
The pandemic seriously affected Salvadoran companies, disrupting economic activities on a large scale and mainly affecting micro, small and medium-sized enterprises (MIPYMEs), which have had liquidity and payment capacity problems, causing inequalities and interrupting the poverty reduction efforts implemented in the country.
El Salvador’s Minister of Finance, Mr. José Alejandro Zelaya said, “This program’s approval will provide the Government of El Salvador with the necessary resources to continue with the policy actions that will allow us to move forward in overcoming the social and economic challenges faced by our country as a result of the effects of the COVID-19 pandemic.”
In order to support the Salvadoran government’s efforts, CABEI approved the “Program to Support Economic Recovery Measures Implemented to Benefit Companies and Employment Affected by COVID-19,” which aims to benefit more than 21,000 MIPYMEs, of which 14,755 are headed by women, as well as the retention of more than 100,000 jobs.
This program has three financial support subprograms aimed at MIPYMEs, the first to provide subsidies to their employees in the amount of US$140 million, the second to provide loans of up to US$360 million, and the third is the productive financing program for entrepreneurs and small traders in the informal sector for US$100 million.
CABEI Executive President, Dr. Dante Mossi noted, “We are certain that this historic approval by our Board of Directors will provide a short-, medium- and long-term stimulus for El Salvador’s MIPYMEs that have been affected by the crisis and will accelerate investments dedicated to overcoming the nation’s social and economic challenges.”
These resources are expected to benefit 4 million people, including owners, employees and family groups. The funds will be channeled through 13 intermediary financial institutions with which CABEI maintains strategic alliances for development,” added Mossi.
The operation is framed within CABEI’s 2020-2024 Institutional Strategy, within the Human Development and Social Inclusion Strategic Axis aimed at generating social capacities to achieve the objective of improving the wellbeing and quality of life in the Central American region, as well as the Sustainable Competitiveness Strategic Axis, which seeks to intervene in strengthening the economic, social, and institutional factors of its member countries.