El Salvador continues its focus on financial inclusion and support for micro and small enterprises, aiming to formalize businesses that have traditionally operated in the informal sector. The government is providing opportunities for entrepreneurs to professionalize their operations and access formal financing.
The National Commission for Micro and Small Enterprises, CONAMYPE, announced that the Banco de Fomento Agropecuario, BFA, has launched a special loan program for neighborhood stores, a sector that previously had limited access to private banking.
“There are nearly 70,000 neighborhood stores. This loan from Banco de Fomento Agropecuario will be approved within 72 hours, up to $10,000; on top of that, Programype provides a guarantee. If the store owner does not have assets for collateral, they can purchase partial coverage to secure up to 90% of the loan, which lowers the rate and reduces the bank’s risk,” explained Conamype President Paul Steiner.
Steiner also highlighted that under President Nayib Bukele’s administration, the number of neighborhood stores has increased, supported by improved public security that allows entrepreneurs to operate freely without fear of extortion from gangs.
“These stores have grown incredibly. For example, in Apopa there was a 227% increase in new stores, but they faced the challenge of not being recognized as formal businesses. Market studies indicate that neighborhood stores generate more than $3 billion in annual sales,” he added, underscoring the importance of the BFA credit initiative for this growing sector.
The comprehensive measures implemented by the government aim to strengthen the entrepreneurial ecosystem, promote formalization, increase productivity, and ensure long-term sustainability, fostering a competitive and equitable economy across the country.