- OPEC Fund loan to BANDESAL supports revitalization of small businesses in El Salvador
OPEC Fund loan to BANDESAL supports revitalization of small businesses in El Salvador
The OPEC Fund and Banco de Desarrollo de El Salvador (BANDESAL) signed a US$35 million loan agreement that will help revitalize the country’s MSME sector.
The funding will support the post-COVID-19 economic recovery of micro-, small- and medium-sized enterprises (MSMEs) in El Salvador. BANDESAL is The Development Bank of the Republic of El Salvador and particularly focuses on lending to this segment to boost development and the resumption of business activities in productive sectors affected by the COVID-19 pandemic.
The OPEC Fund loan is supporting credit lines to finance existing and new businesses and is expected to help create more than 4,500 new jobs and preserve 8,000 existing ones across all sectors. SMEs in Latin America comprise as much as 99.5 percent of all businesses, provide 60 percent of employment and generate 25 percent of GDP.
The agreement was signed by El Salvador’s Finance Minister Alejandro Zelaya, BANDESAL President Juan Pablo Durán and OPEC Fund Director-General Abdulhamid Alkhalifa. Other co-financiers include the World Bank, the Inter-American Development Bank, the Central American Bank for Economic Integration and the European Investment Bank.
“At BANDESAL,” commented President Durán, “we are contributing to economic revitalization by providing new financial and non-financial alternatives that allow SMEs to restore their economic activity and continue to generate great impact on the El Salvadoran economy and society. Aligned with the government led by President Nayib Bukele we will continue to seek innovative and easily accessible tools for SMEs.”
OPEC Fund Director-General Alkhalifa said: “We are pleased to partner with BANDESAL, the government of El Salvador and other international development finance institutions in a collective effort to provide much-needed funding and liquidity to small- and medium-sized enterprises in the country. With our cooperation we are bolstering the economy and helping El Salvadorans to sustain and revive their businesses and jobs.”
The OPEC Fund's COVID-19 response
In March 2020, the OPEC Fund launched its US$1 billion COVID-19 response program and to date almost all has been committed in private sector and sovereign loans. Some focused on the emergency response, such as a US$15 million loan to El Salvador’s Ministry of Health in support of pandemic-related expenditures. Other funding helped to sustain employment, create new jobs, promote international trade and increase connectivity.