El Salvador Partners with Solana-Based Lending Company to Offer Crypto Loans to Businesses, Report Says

  • El Salvador will offer small and medium-sized businesses $10 million in cryptocurrency loans this quarter.
  • The country will partner with the solana-based platform Insight, and the loans will have an annual interest rate of 6% to 7%.
  • This marks the President’s final push Nayib Bukele, a bitcoins bull, to further generalize the use of cryptocurrency.

The Salvadoran government plans to offer small and medium-sized businesses $10 million in cryptocurrency loans this quarter, according to CoinDesk.

The country will partner with Solana-based lending platform Acumen to facilitate loans to El Salvador’s National Commission for Micro and Small Enterprises (Conamype), according to the report.

The loans, Andrea Gómez, Acumen project manager, told CoinDesk, will have an annual interest rate of 6% to 7%, but could reach up to 10%.

That’s a fraction of the 2,300% average annual rate that businesses, largely operating in the informal economy, pay unregistered lenders for loans, said Conamype chairman Paul Steiner.

Under the new lending program, Acumen will convert cryptocurrencies into stablecoins, USDC or tether, and send US dollars to Conamype, which will then distribute the loans to Salvadoran businesses and entrepreneurs.

Gómez said there were 15,000 users on Acumen and he was recognized as a lender to the Central Bank of El Salvador in November.

the crypto loans are bitcoin bull President Nayib Bukele’s latest step to mainstream cryptocurrency in El Salvador, which declared bitcoin as legal tender in September. A little after, he announced his intention to build the world’s first “Bitcoin City”, which would use geothermal energy from a volcano to mine bitcoin, and the launch of a “bitcoin bond”. Bukele also announced when El Salvador is “buying the dip” with bitcoin purchases.

But earlier this week, rating agency Moody’s warned that the country’s bitcoin holdings could increase its default risk, prompting Bukele fires back on Twitter. Cathie Wood of Ark Invest, meanwhile, hailed bitcoin surge from El Salvador, claiming that innovation improves people’s lives.

Janet E. Fishburn