IFC Commits $120 Million to BAC El Salvador to Empower MSMEs, Advance Gender Inclusion, and Promote Green Innovation

MSMEs in El Salvador account for approximately 95% of all registered businesses and provide over 700,000 direct jobs, according to data from the Observatorio MYPE.

In a significant boost to El Salvador’s economic development, the International Finance Corporation (IFC), a member of the World Bank Group, has announced a $120 million financing package to BAC El Salvador—one of the country’s foremost financial institutions. The strategic investment aims to enhance access to credit for micro, small, and medium enterprises (MSMEs), with a strong emphasis on supporting women-led businesses and promoting sustainable growth sectors, including green buildings and ecotourism.

The financing package includes an $80 million long-term loan and a $40 million trade finance line, designed to broaden BAC’s capacity to extend much-needed credit to MSMEs, a sector that forms the backbone of El Salvador’s economy. This initiative marks a deepening of IFC’s partnership with BAC, building on an ongoing advisory project that is helping to scale energy-efficient solutions for small businesses.

Catalyzing Growth and Employment through MSMEs

MSMEs in El Salvador account for approximately 95% of all registered businesses and provide over 700,000 direct jobs, according to data from the Observatorio MYPE. These enterprises play a critical role in stimulating economic growth, especially in underserved communities. However, systemic challenges—such as limited credit histories, information asymmetries, and perceived risk by traditional financial institutions—continue to hamper their ability to access financing.

Currently, nearly 28% of small businesses face serious obstacles in obtaining the loans they need to sustain operations or scale up. The barriers are even more pronounced for businesses led by women, which are 16% less likely to access financial services than those led by men.

This new partnership seeks to change that.

Targeting Gender Inclusion and Sustainability

A key focus of the IFC-BAC collaboration is the empowerment of women entrepreneurs. The financing will prioritize lending to women-led MSMEs, a segment that has historically been overlooked by conventional banks despite its proven potential for economic resilience and innovation.

"Women entrepreneurs in El Salvador have long faced disproportionate hurdles in accessing capital," said IFC Managing Director Makhtar Diop. "By directing financing toward this critical segment, we are not just addressing inequality—we are unlocking the potential of thousands of businesses that can contribute meaningfully to inclusive economic growth."

Fernando González, President of BAC El Salvador, echoed that sentiment, noting, "We are grateful for this partnership with IFC, which allows us to continue driving sustainable economic development in El Salvador. Through this collaboration, we keep laying the foundation for inclusive and lasting growth that benefits all micro, small, and medium enterprises."

In addition to financial inclusion, the agreement will accelerate the bank’s engagement in green finance. As part of its broader commitment to sustainability, BAC will channel part of the IFC funds toward financing energy efficiency, green buildings, and ecotourism—an industry highlighted by the Salvadoran government as a strategic growth area with high potential for job creation and foreign investment.

Expanding IFC’s Impact in El Salvador

The $120 million facility further solidifies IFC’s presence in El Salvador, where its current investment portfolio stands at $620 million. IFC’s initiatives in the country focus on expanding access to finance, supporting key infrastructure projects, promoting gender equity, and advancing climate-resilient development.

This investment is aligned with IFC’s global goals of fostering innovation in financial systems, expanding support for small enterprises, and encouraging private-sector-led solutions to development challenges. As IFC continues to scale up its activities in Central America, this initiative represents a critical step forward in enhancing the region’s financial resilience and sustainable growth.

Looking Ahead: A More Inclusive Future

With this financing agreement, BAC El Salvador is expected to significantly expand its MSME loan portfolio, thereby creating thousands of new employment opportunities and supporting economic recovery efforts in the wake of recent global economic disruptions.

In strengthening El Salvador’s entrepreneurial ecosystem—particularly for women-led businesses and green innovation sectors—IFC and BAC are setting a model for inclusive and forward-thinking development in the region.

This collaboration underscores the importance of tailored financial instruments and strategic partnerships in unlocking the potential of underserved economic sectors and building a more resilient and equitable future for all Salvadorans.