ANNOUNCEMENT 20 May 2020

In May 2020, the government of Ecuador announced the creation of a new credit program called “Reactívate Ecuador”, as a response to the economic crisis originated by the COVID-19 pandemic.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Ministerio de Economía y Finanzas. Ministry of Economy and Finance. Press release. 20/05/2020. “El Gobierno Nacional crea el nuevo crédito Reactívate Ecuador para proteger las plazas de trabajo en el país”. Available at: https://www.finanzas.gob.ec/el-gobierno-nacional-crea-el-nuevo-credito-reactivate-ecuador-para-proteger-las-plazas-de-trabajo-en-el-pais/

Banco del Pacífico. Reactívate Ecuador. Available at: https://www.bancodelpacifico.com/personas/creditos/creditos/reactivate-ecuador

Inception date: 25 May 2020 | Removal date: open ended

State loan

On 20 May 2020, the Ecuadorian government announced the creation of a new credit program called “Reactívate Ecuador” with funds up to USD 1.2 billion.

The main objective of the program is to preserve the employment and operation of national SMEs. The credits can be used to: (i) cover 6 months of payslips; (ii) cover 6 months of essential operative costs; (iii) cover overdue obligations with suppliers; and (iv) other obligations until 31 December 2020.  For this, the credits will range between USD 500 and USD 500 000. The fixed interest rate is 5%, with a maximum term of 36 months after a 6-months grace period.

The credit line will be available since 25 May 2020, through the intermediary agency is ‘Banco del Pacífico’.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted to national SMEs is discriminatory.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 25 May 2020 | Removal date: open ended

Loan guarantee

Alongside with the credit program "Reactívate Ecuador" announced on 20 May 2020, the Ecuadorian government also stated that the National Guarantee Fund (CFN in Spanish) will supply loan guarantees for up to 80% of the total loan value to those SMEs that cannot afford them by themselves and that are granted a loan through the new credit program.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted to national SMEs is discriminatory.

 
 
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