Loan for $20 million will support training, employment, and improved opportunities for economic growth
The Inter-American Development Bank (IDB) approved a $20 million loan to El Salvador to fund a training project that will improve the labor force productivity, particularly for young people between 16 and 29 years and workers in micro- and small-scale enterprises.
The project will train 6,000 youths for jobs for which they would not otherwise be qualified. One innovative project component will finance training for some 1,600 young entrepreneurs in the development of business ideas. The youths with the best business plans will receive project backing to establish their own microenterprises.The project will also provide assistance to participating mothers for the care of their young children.
In addition, the project will finance training for workers in more than 1,300 micro- and small-scale enterprises.The project will also benefit more than 15,500 businesses across the country through the promotion of good practices to prevent accidents in the workplace.
"The first step in achieving this project’s success is to strengthen the Ministry of Labor and Social Welfare," said Verónica Alaimo, IDB project team leader."Improvements in information systems and monitoring will enable the ministry to extend coverage and effectiveness of employment, labor, and social welfare policies."
Of El Salvador’s 6.2 million inhabitants, 63 percent of whom live in urban areas. Twenty five percent of the total population is young, has little education, no work experience, and no opportunities for the future. While the country's urban unemployment rate of 6.7 percent is below the regional urban rate of 7.3 percent in Latin America, many workers have precarious and informal employment.
The program will be implemented by El Salvador’s Ministry of Labor and Social Welfare and the National Micro and Small Enterprise Commission.
The IDB financing is extended for a term of 25 years, a grace period of 5.5 years and an interest rate based on LIBOR.
- Ángela Fúnez