ES-L1038 : Financing for Municipal Market Modernization

The objective of the proposed operation is to support the modernization of municipal markets in El Salvador through financing and technical assistance for the construction, remodeling, and upgrading of physical, technological, functional, and business and administrative management infrastructure to improve the proposals and the competitiveness and income of microentrepreneurs as well as sanitary and environmental conditions for Salvadoran communities. To attain this objective, the Opportunities for the Majority (OMJ) Sector proposes to grant a credit facility to the Federation of Savings and Loan Associations and Workers¿ Banks (Fedecrédito) for up to US$20 million, composed of an A loan for US$10 million with resources from the OMJ Facility, subject to market conditions, and a B loan to be syndicated to international lenders, for approximately US$10 million (or an amount to be determined depending on market conditions). Fedecrédito, a secondtier financial institution, will channel the funds to member institutions in its system 48 savings and loan associations and seven workers¿ banks¿and they, in turn, will channel them through 115 agencies located around the country to the municipalities that administer the markets. Specifically, for the purposes of the project, the loans to finance the construction or upgrading of municipal markets will be granted based on need and the ability to pay of each municipality.