6 million euros in non-reimbursable resources to promote entrepreneurship and innovation in Salvadoran MSMEs
CABEI, KfW and the EU launch Special Window of El Salvador as part of the Financial Sector Support Facility for MSMEs affected by COVID-19.
San Salvador, June 12, 2020.- Today, the Central American Bank for Economic Integration (CABEI), German Financial Cooperation through KfW, and the European Union, launched the Special Window of El Salvador for 6 million euros within the framework of the Financial Sector Support Facility for micro, small and medium-sized enterprises (MSMEs) affected by the COVID-19 crisis, which was launched on May 29.
The Facility's goal is to provide access to credit resources for MSMEs to finance their working capital and investment needs through its network of intermediary financial institutions. Eligible MSMEs include those in the production sectors of the agri-food chain, renewable energy, energy efficiency, cleaner production, hospitality and tourism, construction, creative industry, media, trade and service provision.
The resources will be granted through the Green MSME Initiative and the DINAMICA Initiative, both of which are tripartite regional-level programs of the EU, KfW and CABEI. The programs have available resources amounting to 83 million dollars from the Government of Germany through its KfW Development Bank. Likewise, the European Union, through its Latin American Investment Facility (LAIF), supports the two programs with an amount of US$28.5 million for guarantees, seed capital and non-reimbursable technical assistance.
As part of the DINAMICA Initiative, the Seed Capital-El Salvador Window Program aims to boost young entrepreneurship and innovation. Resources will be made available for seed capital and donations, as well as credit guarantees and technical assistance for entrepreneurs and young micro and small enterprises. The Window will also provide technical support to business development centers, entrepreneurs and MSMEs, and Financial Institutions that seek to develop specific financial products to attend Salvadoran MSMEs.
This window represents the joint effort of the European Union and the Government of El Salvador through the National Commission for Micro and Small Enterprises (CONAMYPE), which has decided to allocate resources from bilateral cooperation of the European Union and El Salvador to meet specific needs of the entrepreneurial ecosystem and Salvadoran MSMEs.
The credit resources will be available through the intermediary financial institutions that channel CABEI resources by means of a global credit line. In the case of donations, the non-reimbursable resources may be accessed in the same way through the banking system; in the case of technical assistance, it will be done through the different business development centers; and for financial institutions, it will be carried out directly by CABEI.