Economy
Jose A. Barrera
Tuesday 26, January 2021 • 4:15 am
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The Development Bank of the Republic of El Salvador (Bandesal) seeks to become an engine for the recovery of the economy. The entity confirmed yesterday that it intends to inject $ 400 million into the productive fabric, of which around $ 300 million have already been approved by multilateral organizations.
The president of the entity, Juan Pablo Durán, explained that, after the implementation of a specific regulation for the bank, the way is opened to grant direct credits to the productive sectors as “first-floor bank.”
The funds are in addition to the $ 600 million that the entity manages as part of the Trust for the Recovery of Salvadoran Companies (Firempresa).
The official hopes that the funds from the multilaterals will be approved by the Legislative Assembly and will contribute to promoting 11 new credit lines that the institution presented yesterday and that include items such as agriculture, coffee, sugar cane, agribusiness, construction of the orange economy, guarantees, capital recomposition, debt consolidation and refinancing, as well as four branches of special credits and 17 of guarantees.
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The four special lines They include women’s banking, EmprendES banking, energy efficiency for SMEs and a new microcredit plan.
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Durán said that of the $ 300 million approved, $ 200 million are from a line approved by the Inter-American Development Bank (IDB), $ 40 million from the European Investment Bank, $ 35 million from the Fund of the Organization of Petroleum Exporting Countries (OPEC) and $ 15 million from the Panama Bladex and anticipated that they will negotiate $ 100 million with the World Bank.
Each sector of the economy needs and demands an ‘ad-hoc’ line of credit for the economic activity it carries out. We have created 11 lines for all sectors ”, Juan Pablo Duran, President of Bandesal
“We are doing our job, we hope that the deputies, who would only have to ‘push’ that button, to give us the sovereign guarantee, “said the official who insisted that the funds will not become country debt, since the bank has a triple” A “rating.
Optimism in the private sector
Representatives of the private sector were optimistic about Bandesal’s new offer.
Silvia Cuéllar, executive director of the Corporation of Exporters of El Salvador (Coexport), said that one of the recurring requests from entrepreneurs is the need for competitive credit lines and low interest rates.
It is a quite viable alternative, Coexport is about to sign an agreement with Bandesal precisely for that, to channel the needs of the sector ”, Silvia Cuéllar, Executive Director of Coexport
“We believe that this effort is a quite viable alternative and Coexport is about to sign an agreement with Bandesal precisely for that, to channel the needs of our exporters and entrepreneurs,” he said.
Coexport is interested in the emphasis in the plan for the sector that seeks to recover in 2021 after a year marked by the pandemic.
11LinesDirect credit announced by the bank yesterday, these include coffee and construction.
17TypesBandesal announced guarantees, these include the orange economy and exports.
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Durán explained that, on average, the loans that the bank manages have an interest rate lower than 3% and with terms of more than 15 years, which allows it to manage risk well and benefit depressed sectors.
There are certain risks that private commercial banks are not willing to take, that is why development banks have a different risk profile ”, Jorge Hasbún, President of the Chamber of Commerce and Industry of El Salvador
Jorge Hasbún, president of the Chamber of Commerce and Industry of El Salvador (Camarasal), indicated that the entity supports Firempresa, channeled by Bandesal, and that they are part of its citizen oversight committee. He considered that knowing the new offer is important since many loans do not compete with banks but rather complement them, such as entrepreneurship and energy saving.
This week they will ask for changes in the Assembly for Firempresa
Juan Pablo Durán, president of Bandesal, anticipated that they are coordinating with the Ministry of Economy and the Legal Secretariat of the Presidency of the Republic the changes they will present for the operation of Firempresa.
The official announced that they hope to visit the plenary session this week and request modifications for $ 77.9 million that will be used to reinforce support for companies in the informal sector of the economy and subsidies for artistic, transport, artisanal fishing and entrepreneurs with disabilities, in addition to an increase in the ceiling for the loans of the credit granting program for MSMEs (of $ 360 million).
The entity seeks to raise the ceiling from the current $ 25,000 to close to $ 500,000, as well as add capital formation as a destination and settle debts with the treasury.
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