More new ideas from El Salvador, the country now founded on Bitcoin. Indeed, just in line with his bitcoinization agenda, he came up with secured loans from the queen of cryptocurrencies to small and micro businesses. This is another step that manages to kill two birds with one stone. On the one hand, it continues to spread crypto in the country. On the other hand, it supports the needs of small entrepreneurs seeking human interest rate financing for theirs. companies.
Bitcoin as collateral for a loan
During a Live Audio on Facebook, Monica Taher, consultant to the government of El Salvador, revealed that the next step will be to adopt Bitcoin to guarantee a to lend. Initially, as already mentioned, these solutions will only be aimed at small and micro-enterprises. This will allow the country to provide low interest loans in a way that is accessible to everyone.
We still don’t know the details of how this new opportunity will work. Nothing concrete has been disclosed. So we expect updates on this to come in the next few days. Meanwhile, Paul Steiner, president of the National Institute of Small and Micro-Enterprises of El Salvador, stressed the urgency. It is the extreme necessity of loans at low interest cost. Bitcoin could therefore be the most effective solution. Here is the situation in the country which, according to Steiner, is now saturated:
El Salvador has around 1.2 million businesses in the country, of which around 66% are micro or “subsistence” businesses. More than 90% of micro-enterprises finance themselves through informal loans or loan sharks.
The queen of crypto as mortgage collateral
To choose Bitcoin getting a loan, as long as it has a low and human interest, is a very important step forward. This will enable El Salvador to combat this criminality born precisely from the adoption of loans at too high rates. Loan sharks and criminals should therefore have their days numbered.
Finally, another novelty came out of Live on Facebook. The idea is to allow the use of Bitcoin also as mortgage guarantee. In short, a series of solutions are in preparation. We just have to wait for their realization as well as Bitcoin City and everything behind it.