El Salvador is partnering with a solana-based lending company to offer crypto loans to businesses, report says

• El Salvador will offer small and medium-sized companies $10 million in cryptocurrency loans this quarter.
• The country will partner with solana-based platform Acumen, and the loans will have an annual interest rate of 6% to 7%.
• This marks the latest push by President Nayib Bukele, a bitcoin bull, to further mainstream the use of cryptocurrency.

El Salvador's government plans to offer small and medium-sized companies $10 million in cryptocurrency loans this quarter, according to CoinDesk.

The country will partner with solana-based lending platform Acumen to facilitate loans for El Salvador's National Commission for Micro and Small Enterprises (Conamype), the report said.

The loans, Acumen project manager Andrea Gómez told CoinDesk, will have an annual interest rate of 6% to 7%, but could reach up to 10%.

That's a fraction of the 2,300% average annual rate that businesses, largely operating in the informal economy, pay to unregistered lenders for loans, Conamype President Paul Steiner said.

Under the new lending program, Acumen will convert cryptocurrencies to stablecoins, either USDC or tether, and send US dollars to Conamype, which will then distribute the loans to Salvadoran businesses and entrepreneurs.

Gómez said there are 15,000 users on Acumen, and it was recognized as a Central Bank of El Salvador lender in November.

The crypto loans are the latest step by President Nayib Bukele, a bitcoin bull, to mainstream cryptocurrency in El Salvador, which declared bitcoin as legal tender in September. Soon after, he announced plans to build the world's first "Bitcoin City," which would use geothermal power from a volcano to mine bitcoin, and the launch of a "bitcoin bond". Bukele has also announced when El Salvador "buys the dip" with purchases of bitcoin.

But earlier this week, rating agency Moody's warned that the country's bitcoin holdings could increase its risk of default, prompting Bukele to hit back on Twitter. Ark Invest's Cathie Wood, meanwhile, commended El Salvador's bitcoin push, saying the innovation is making people's lives better.