Montréal, November 15th, 2021. FinDev Canada announced a loan of $10 M to FEDECRÉDITO for the 48 credit unions and 7 banks for workers that are members of the SISTEMA FEDECRÉDITO so they can support micro-, small- and medium-sized enterprises in El Salvador. At least 40% will go to SMEs led by women.
El Salvador has 635,000 SMEs, which support over 855,000 jobs. Around 60% of these are owned or led by women. However, many of the smallest enterprises continue to face funding challenges; at least 40% have some difficulties.
The SISTEMA FEDECRÉDITO contributes to and promotes financial inclusion and access to banking services for residents, which is why all its products and services are available to Salvadorans. It has taken a keen interest in coming up with financial solutions for everyone to reduce the barriers to financial services in the country. Furthermore, it has increased its coverage to facilitate access to its financial products and services, with more than 790 service points in 195 municipalities throughout the country, where people can use its network of 280 FEDE RED 365 automatic bank machines, which are available 24 hours a day, as well as the more than 230 FEDE PUNTO VECINO locations, where people can conduct financial transactions in their area. This also makes it easier for its partners and clients to access the FEDE MÓVIL and FEDE BANKING digital channels at any time, in any place. All these services are available to Salvadorans through an innovative and accessible tech platform.
“The SISTEMA FEDECRÉDITO plays a vital role in serving the SME segment, as it is a key driver of El Salvador’s economy,” says Paulo Martelli, Chief Investment Officer at FinDev Canada. “This loan will support economic development, which will be seen in improved living conditions and increased economic opportunities for everyone,” he adds.
“We are proud of our role in addressing SMEs’ needs for access to funding, as we recognize the major role this plays in El Salvador’s economy. The funding of US$10 M provided by FinDev Canada will help us boost the economic recovery of segments that were hit hard by the COVID-19 pandemic and create opportunities for growth” – Macario Armando Rosales Rosa, President and CEO of FEDECRÉDITO.
Women’s economic empowerment
With the commitment to direct at least 40% of the loan funding to SMEs owned or led by women, the loan to FEDECRÉDITO is eligible for the 2X Challenge. Currently, nearly one-third (in volume) of SISTEMA FEDECRÉDITO loans are intended for Salvadoran women entrepreneurs, and the loan from FinDev Canada will allow for funding to be offered to SMEs owned or led by women, thereby creating new growth and job opportunities.
Local economic development
FinDev Canada’s financial assistance will help the SISTEMA FEDECRÉDITO support thousands of SMEs in El Salvador. In turn, these enterprises are expected to create thousands of jobs directly and indirectly, which will help improve the living conditions for many more.
Development Finance Institutions and COVID-19
FinDev Canada has a mandate to support companies that have a presence in the areas most affected by the COVID-19 pandemic. Investments will help guarantee that developing markets continue to have liquidity, providing important support for the recovery of the economic and social consequences of this crisis.
About FinDev Canada
The Development Finance Institute Canada (DFIC) Inc., operating under the FinDev Canada brand, is a Canadian institution dedicated to providing financial services to the private sector in developing countries with the aim of combating poverty through economic growth by focusing on three main topics: economic development through job creation, women’s economic empowerment, and climate change mitigation. The Development Finance Institute Canada Inc. is a wholly owned subsidiary of Export Development Canada (EDC).
The FEDERACIÓN DE CAJAS DE CRÉDITO Y DE BANCOS DE LOS TRABAJADORES (FEDECRÉDITO) is a second-tier bank and member of the SISTEMA FEDECRÉDITO, which provides specialized advice to its partner organizations (credit unions and banks for workers); it also manages the SISTEMA’s international relations, among other things. To find out more, go to fedecredito.com.sv
MEMBER ORGANIZATIONS OF THE SISTEMA FEDECRÉDITO: 48 credit unions, 7 banks for workers, 2 insurance companies, 1 company that provides complementary services (FEDESERVI) and its federation.
About the 2X Challenge
The 2X Challenge was founded by the Development Finance Institutions (DFIs) from the G7 as a call to action to shift more capital towards investments that empower women in developing countries to access entrepreneurship and leadership opportunities, quality jobs, and products and services that enhance their economic participation. More information about the 2X Challenge can be found here: https://www.2xchallenge.org.
What’s the criteria for qualifying for a 2X investment?
- Whether a business is majority owned by women or founded by a woman
- The share of women in senior management or on the board
- The share of women in the workforce
- Whether a product or service specifically or disproportionately benefits women
- If a certain percent of loan proceeds in a deal through financial intermediaries supports women.
Head of Marketing and Communications