Announcement of World Bank Supports Small-Scale Enterprises in Ecuador on June 23, 1980

, FO.R IMMEDIATE RELEASE . · () World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 80/127 June 23, 1980 WORLD BANK SUPPORTS SMALL-SCALE ENTERPRISES IN ECUADOR The World Bank has approved a $20 million loan to help finance a small- scale enterprise credit proj~ct in Ecuador. This is the first Bank loan to support small-scale enterprise deve1cpment in Ecuador on a national level. The loan will assist the Government of Ecuador to develop a more dynamic small-scale enterprise sector which will help generate employment, improve income and promote regional development. The project will make available a line of credit of approximately $33.3 million in medium- and long-term resources to small-scale enterprises. The World Bank loan will be channelled to participating banks and development finance compan- ies through the Corporacion Financiera Nacional (CPN), the oldest and largest development finance company in Ecuador, totally owned by the government. • The beneficiaries of the project will be private sector enterprises with fixed assets of less than $350,000, which employ up to 25 to 30 employees. Most firms of this size have had little or no access to term financing in recent years. About 625 subloans each averaging $53,000 are expected to be made to small-scale enterprises, largely in the wood, food, textiles, and metal products sectors. The subloans will result in the creation of some 4,300 jobs. Total financing for investment projects to be provided under the project will add an estimated 15% to 20% per annum to available term credit for the small- scale enterprise sector over the loan commitment period (1981-83). The $20 million loan to the Republic of Ecuador has a term of 17 years, including 4 years of grace, with interest at 8.25% per annum. The World Bank has previously extended four development banking loans to Ecuador totalling $94 mill ion . • NOTE: All money figures are expressed in U.S. dollar equivalents.