Home to 6.5 million people, El Salvador is both the smallest and most densely populated country in Central America. Since the Spanish took control of the country’s indigenous cocoa crops in the 1500s, much of the economy has been fuelled by agriculture, with a focus on coffee exports and sugar cane production in more recent years. Lately, there’s been a shift towards the service economy.
The country has historically endured noticeable levels of gang-related crime and poverty, although between 1998 to 2019, there was an economic upswing leading to El Salvador having one of the lowest income inequality levels in Latin America and the Caribbean, per the World Bank’s Gini index.
Small and medium sized enterprises, or SMEs, employ over one-third of the workforce, while contributing to nearly half of the country’s GDP. While it dropped considerably during the COVID-19 pandemic, El Salvador’s economy rebounded by almost 11% in 2021, showing a favourable outlook—in part because of SMEs and increased domestic demand.
A customer-first bank
Banco Promerica El Salvador is part of Grupo Promerica, which has 30 years of experience as a regional financial institution in Latin America. With over 50 branches and 130 ATMs, the bank has a nationwide presence. Although a universal bank, they have carved out a niche for itself, providing customised support for the SME client segment that plays a substantial role in the economy.
Banco Promerica offers a broad range of customized products for this market segment—such as corporate loans, short- and medium-term working capital facilities, credit cards, and personal loans. However, they take their strategy a step further, placing a strong emphasis on flexibility through adaptable products and services, empathy, and proximity through local decision-making. The bank consistently provides its SME clients with a customer-centric approach. Additionally, Banco Promerica has made several important alliances that help support SMEs by creating direct linkages between SME clients and unions, such as USAID, Bandesal, BCIE, and the Chamber of Commerce.
That said, SME clients are not the only focus: Banco Promerica has also focused on building their Green Portfolio which provides an additional competitive advantage in the market. One thing is certain: the bank’s strategy has been and remains successful. Overall, it has experienced sustained financial growth and profitability in the past several years and has strong liquidity and asset quality—a testament to its unique approach.
The FMO Loans
An FMO customer since 2017, the first transaction was a USD 20 mln facility split between SMEs and Green activities, followed by another USD 25 mln facility in 2020 to help grow Banco Promerica’s SME portfolio, while also providing much-needed long-term funding.