The Salvadorian government is set to develop a Bitcoin-backed loan product for micro and small businesses across the nation, according to a report by CoinTelegraph on Thursday.
Even though the details of the BTC loans are not disclosed, Mónica Taher, an advisor for the government of El Salvador, stated that a discussion was held about Bitcoin loans with lower interest rates.
Paul Steiner the President of CONAMYPE (the national institute for small and micro-businesses) shared that the implementation of the loans would be done alongside government-created El Chivo wallet.
El Salvador’s business ecosystem is dominated by small and micro-businesses, and Bitcoin-backed loans present an opportunity to remediate the situation.
Steiner pointed out that El Salvador has nearly 1.2 million businesses in the nation. Nearly 66% are micro-businesses, and more than 90% of micro-businesses are self-funded through informal loans.
The interest rate required by BTC-backed loans would be much lower than those offered by informal lenders, banks, and loan sharks.