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Ecuador will support the financial sustainability of MSEs with IDB support

A $93.8 million loan will contribute to the support of micro and small businesses and employment in the face of the COVID-19 crisis

Ecuador will support the financial sustainability of micro and small companies (MSEs) and the maintenance of employment in the face of the COVID-19 crisis with a loan of $93.8 million approved by the Inter-American Development Bank (IDB).

The project will help MSEs affected by the health emergency overcome temporary liquidity problems and be able to continue their operations with credit products and/or guarantees to secure financing for working capital. In addition, it is expected to increase the number of short-term loans to MSEs led by women in the portfolio of the National Corporation for Popular and Solidarity Finance (CONAFIPS).

The main problem that afflicts MSMEs (Micro, Small and Medium-sized Enterprises) is the lack of liquidity to sustain business and employment due to a reduction in their operating income and a greater delay in their collections. According to a calculation based on data from the Superintendency of Companies, 50% of Ecuadorian companies would resist less than 37 days without sales, and 75% less than 70 days. The sectors most impacted would be those associated with agriculture, accommodation and catering, and administrative service activities.

The program will finance direct subloans to 16,038 MSEs members of the Credit and Savings Cooperative, through which the resources will be channeled. It is also estimated that it will benefit 12,691 SMEs through CONAFIPS guarantees for short-term credits to be granted through the Organizations of the Popular and Solidarity Financial System, mainly Savings and Credit Cooperatives.

The IDB loan of $93.8 million has a repayment term of 25 years, a grace period of five and a half years and an interest rate based on LIBOR.

About us

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region. 

Contacts

Funez Trejo,Angela Maria

Funez Trejo,Angela Maria
Additional Contacts

Prats Cabrera,Joan Oriol

Prats Cabrera,Joan Oriol

Puig Gabarró,Pau

Puig Gabarró,Pau
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