Reactívate funds to Ecuador come from abroad

The project of lines of credit for micro, small and medium-sized companies, called Reactívate Ecuador , will begin with a first stage of 500 million dollars given by international organizations for the creation of a public fund . The Secretary of the Economic and Productive Sector Cabinet, José Andrés López , explained the origin of these items that will be channeled through the Banco del Pacífico.

Reactívate funds to Ecuador come from abroad

In a videoconference held on the afternoon of this Tuesday, May 26, 2020, López listed the four stages of loans for the reactivation of the productive sector , through a total of 1,150 million dollars that Ecuador will receive from the multilaterals.

Of that 500 million item, which are already in the country, they were sent by the World Bank (200 million), the International Monetary Fund (100 million) and other external sources (200 million). The process to access the credits began on May 24 on the Banco del Pacífico website. In two days, more than 300,000 people started applications to purchase them.

The executive president of Banco del Pacífico, Efraín Vieira , recalled that the conditions of the loans establish terms of 12 to 36 months , with a six-month grace period. After 10 days of submitting the virtual application, the beneficiaries will receive the requested amount, which varies according to their type of company.

Components of the project

The 1,150 million dollars of Reactívate Ecuador are made up of three additional lines of credit to the 500 million mentioned. These resources will begin to arrive in the country from June.

In the first days of the month, 93.8 million will be disbursed from the Inter-American Development Bank (IDB) as a loan for the National Corporation for Popular and Solidarity Finance (Conafips).

Subsequently, 260 million will be received from the World Bank  to go to the National Finance Corporation (CFN). Finally, 300 million allocated by the United States Development Corporation (DFC) are expected to work with a private fund from the Ecuadorian financial sector.

“By the end of the year, a large part of these resources will have been consumed, but the general policy is to expand the coverage of these funds,” López said. The objective is for companies to allocate the credits to cover six months of the payment of their payroll, operating costs, expired obligations with suppliers and other obligations foreseen until December 31, 2020.

The official from the Ministry of Economy and Finance, a portfolio headed by the Sectorial Cabinet of Economy and Production, recalled that these loans were achieved thanks to the government’s decision to make a debt disbursement to bondholders to access future international credits.