Use of cookies

This website uses essential first-party cookies and non-essential third-party cookies in order to make your browsing experience safer and facilitate statistical analysis of its usage.
If you would like more information about these cookies or would like to change your browser configuration, please refer to our Cookies Policy.
Click on "Disable cookies" or "Accept cookies" to confirm you have read and agreed with the information provided here.

Español     Home


November 21, 2013

The first microcredit adapted to the needs of small farmers in the Dominican Republic

Tags: rural microcredit, agricultural microcredit, Dominican Republic | by Manuel Sena, Fundacion CODESPA delegate in the Caribbean

Aware of the vulnerability of the agricultural sector in the Dominican Republic, which represents 16% of GDP, our local partner - ADOPEM Bank, member of the BBVA Microfinance Foundation -, took the first steps in 2008 to meet the demand for microcredit in this economic sector.

It was in 2010 when, with our support and AECID’s, the Bank designed a specific microcredit product adapted to the particularities of the agricultural sector and small farmers, according to the different production cycles and revenue streams, and therefore allowing, among others, full payment of the loan right after the harvest period.


Fuente: Fundación CODESPA

The pilot was developed in the province of San Juan de la Maguana in the Southern Region of the Dominican Republic, and allowed us to validate and adjust the product prior to its commercial launching.

The main problem we encountered was that policies, procedures, and the information system were specialized in meeting the credit demand in the commercial and service sectors, characterized by short term product cycles, regular income streams and capability to pay monthly loan fees. We also found that there was a lack of expertise in managing agricultural loans. These issues were also addressed for improvement.

By June 2013, the rural loan portfolio originated within the project reached USD 6.5 million and more than 12,000 microfinance loans. The agricultural loan portfolio reached over USD 2.5 million and more than 4,100 microloans.

Read more

November 13, 2013

The role of inclusive finance

Tags: microcredit, over indebtedness | by David Díaz de Quijano i Barbero, OikoCredit Catalunya

Why is microfinance so important and why does it works?

Anton Simanowitz, renowned British academic and specialist working with Oikocredit, gives us a great understanding of how the microfinance industry works, and the basis for it to have a positive impact in society.

In this interesting interview with Simanowitz on microcredits, he tells us that the ultimate goal of microfinance is to provide financial services to those people who are excluded from conventional financing channels. Thus, microcredits play a key role in providing the necessary resources when they are most needed, under appropriate and adapted conditions to the borrower, taking always into account the situation of uncertainty and unpredictability under which most of the target groups usually live.
Given the challenges presented by overindebtedness episodes, Simanowitz advocates a thoughtful and responsible use of microfinance, emphasizing the fact that its mere use doesn't erradicate poverty, but using this financial product along with a conscious choice of groups and their potential to pay back the amounts borrowed.


Microfinance client Valdomero Vizueto, with loan officer Marcelo Guamán, from credit cooperative COAC Fernando Daquilema, in Ecuador

Finally, Simanowitz presents the fundamental basis to stimulate the potential of microfinance: (i) extensive knowledge of the real needs of the clients, as well as (ii) a thorough screening and selection processes in place. Additionally, he emphasizes the importance of microfinance institutions being flexible, agile, tolerant and understanding towards their clientes, particularly in situations of default and higher risk cases.

 Read the whole interview to Simanowitz in Oikocredit's website
October 30, 2013

Celebrating the Fourth meeting of the Spanish Microfinance Network

Tags: microfinance, Spain, remEX, strategic planning, performance | by Verónica López Sabater

The IV annual meeting of the Spanish  Microfinance Network (remEX) took place last Wednesday, October 23th. It was the first time this year that all members and observators could meet face to face.

Besides being a pleasure to have the opportunity to share physical space and time with remEX members and observers, we had the chance of discussing for about three hours the issues that we all had agreed to discuss:

  • review of the strategic plan,
  • presentation of the network's performance indicators,
  • presentation of this year's activity of the 4 working groups, and
  • expectations and challenges for 2014 , among which includes greater dissemination of the knowledge generated within existing working groups.


In this occasion, Afi's School of Applied Finance Afi allowed us to occupy their facilities to accommodate the 23 members and 8 observers who today form the remEX, many of whom had to travel from across the country to attend the meeting.

The next meeting will take place in the first half of 2014 .

October 17, 2013

What microfinance? Or how to make microfinance work for the poor

Tags: microfinance, over-indebtedness, self-financed communities | by Laia Oto Llorens & Miquel de Paladella, founders of 1x1Microcredit
Microcredit and microfinance progressed unchallenged until 2010, with virtually no criticism or questioning. It looked like the new panacea for development: access to credit would permanently generate opportunities for the poor to escape poverty. The crisis in India that led millions of poor families to dramatic levels of over-indebtedness generated a credibility gap that helped us understand which practices and services are really helpful for poor communities, and which ones have negative impacts. We have finally learnt that microfinance can be counterproductive, irrespective of our good intentions; and we have also learnt that microfinance can be a powerful tool to increase the resilience of vulnerable communities.

Some microfinance institutions have caused high levels of indebtedness among poor communities due to their aggressive attitude to place capital. In Europe, where financial education is somehow higher than in many other countries, many people have fallen into the trap of over-indebtedness. It is then easy to imagine what has happened in countries with a lower educational level. The lesson learnt is that microfinance cannot be directed by the supply, it should not be driven by the interests of investors to place capital and generate financial return, but it should respond to the demand from the clients. The benefits of microfinance may get diluted by the negative effects of over-indebtedness when microfinance is driven by the offer.

The other major criticism to microfinance focuses on interest rates. This is a complex problem. In populated countries, the costs of microfinance services and therefore the interest rates tend to be lower than in countries where the population is scattered. Domestic inflation also complicates the equation. The major challenge of microfinance is in fact the transaction costs. The costs of managing thousands of small loans to people who are in rural areas, geographically disperse, is much larger than when managing a few large credits to a few clients or companies in the same location. Making microfinance services sustainable and scalable requires a full coverage of all its costs.

One of the most powerful and proven solutions that minimize the adverse effects of credit (they never go away) are self-financed communities, the Bankomunales, or similar systems. The idea is simple: credit is important, but savings are even more critical. Indeed, the poor are able to save money. The proof is that there are more than 250,000 savings groups worldwide. These are groups of 20-30 people who manage their money independently: they put their savings together, and respond to the demands of small loans of its members, and they charge a small interest rate. It is an effective, efficient and affordable way of promoting savings, and providing access to credit for small cash flow problems. In these self-funded communities there is often excessive supply of credit, management costs are very low, and interest rates are set at the discretion of its members. Finally, the profits generated by loans and their interests are shared among all members, which makes the interest rates relatively unimportant.

1x1Microcredit ´s obsession since its foundation has been to increase the resilience of the most vulnerable populations, and helping them escape poverty through useful proven microfinance mechanisms. We saw that the benefits of accessing credit depended on the poor communities’ ability to generate savings and investment schemes that would eliminate the negative effects, reduce transaction costs and increase opportunities. Therefore, we have focused on promoting self-funded communities and offer credit only to those engaged in this type of savings groups.

Self-funded communities however fail to finance investment projects of over 1,000€ or 2,000€. This is where 1x1microcredit gets activated. When members of self-funded communities require larger credits for their projects, 1x1Microcredit provides them access to credit through our partner organizations. They also offer microcredit together with financial education and training, as in the case of Fundación Paraguaya -offering quality training, accompanied by a microcredit- or Diyite, advising women entrepreneurs in their income-generating initiatives.

This is how we expect to make microfinance a powerful tool to support the development of many poor families.


Links a videos to embed:

September 26, 2013

Microcredit in kind: an opportunity for the most excluded rural communities

Tags: microcredit in kind, micro farm, Haiti, revolving fund, access to credit, food security, farming tools bank | by Linda Facchinetti, Director Fundacion Nantik Lum

Noel Clautide lives in a mud house with a tin roof in a small rural village in the municipality of Balan, Haiti. She is a widow and has eight children. Five of them are deaf and mute and share their mother´s house with their own children. Their husbands abandoned them because of their disability. In Balan, as in most rural dwellings in Haiti, communities do not have access to water, electricity or proper sanitation services nor the local government has a plan to improve the current situation. In October 2012, Noel Clautide and her family survived hurricane Isaac and managed to save their house from collapsing thanks to a wooden pole borrowed from a neighbour. What is the opportunity that access to microcredit generates for women forgotten and in need like Noel Clautide?

(Photo: Noel Clautide with Beneco Enecia, head of Cedeso) 

The condition of extreme vulnerability of these women makes it necessary the use microcredits in kind, a new tool which consists in delivering directly to them consumer goods, tools, seeds or animals which have been previously selected and purchased in the local markets.

Microcredits in kind are especially effective when employed with very vulnerable populations who are not able to cater for their families´ basic needs or who do not have sufficient resources or knowledge to travel to the local market and purchase the goods they need to develop their micro businesses. 

Through the microcredit facility in kind, Noel Clautide received three goats which she raised for consumption and trade. Another 162 women participated to the initiative. They received goats and/or green beans seeds following approval of their application by the credit committee whose members are local communities leaders supported and trained by local professionals. 

One of the key objectives of this project consisted in providing food security to rural families in extreme poverty. Another stated objective was the generation of income through the sale of products from the micro farms in order to ensure their sustainability, thus improving the living conditions of the communities in the West Department of Haiti.

(Photo: first delivery of green beans seeds) 

Access to credit in kind works like an injection of capital in a farm so that, after several production cycles, the farmer is able to pay back in kind to the Fund the credit received (plus an ´interest´, also in kind). The monies accumulated may thus be disbursed as new micro credits in kind to other families in the community. This process achieves the constant rotation of the Fund. In order to maximize the impact of the Fund in the long term, the Haiti project included not only access to credit but also support to community-based organization and its leadership in the decisions relating the management of the Fund in kind so that this activity may be taken over by the communities without the need for constant external technical assistance.

In addition, we also worked to advance participants’ technical knowledge through training courses on farming techniques and small farms management with the objective to improve farmers’ skills in these areas. We must also remember that progress in the self awareness and empowerment of the women who participated to this action and who fulfill a triple role as mothers, workers and active participants to community life, represents a key strengthening factor for them as it helps them become agents for change and of community development. 

(Foto: protect banner in creole, Balan school)

After over twelve months since this proyect was launched, we can already detect two important signs of success. Firstly, more that forty farmers have applied for their second microcredit in kind; secondly, and not less important, the project has secured additional funding to set up a Farming Tools Bank which will rotate amongst the micro farms who have received a microcredit in kind, applying the same methodology. 

Through access to a microcredit along with training in Haiti, we can deliver opportunities to resolute and hard working women like Noel Clautide, who are the first to get up and the last ones to go to bed.  Stronger community awareness, social cohesion and socio-economic inclusion of women and their families represent some of the positive outcomes of micro finance. Noel Clautide is very special, but there are millions of stories of women who possess the abilities and who long for helping their families and communities but lack the opportunity. Micro credits in kind are the solution for many of them. 

This project and the Agricultural Tools Bank were managed by Fundaciòn Nantik Lum. Both initiatives were made possible by the generosity of Clifford Chance and the collaboration of the Haitian-Dominican NGO Cedeso.

August 12, 2013

Microfinance in Paraguay. Going back to basics

Tags: Microfinanzas, Paraguay | by Marcel Abbad Sort. MACS Consultoría Social

I´ve been working hard in order to organize (and start) a new MFI (Micro Finance Institution) in northern Paraguay. Specifically, in the province of San Pedro, which along with Concepcion are the northernmost areas.

A little to the north of the capital of the province, and almost touching to Brazil, there are four extremely poor human settlements, lost in the middle of nowhere, and hidden from the view of humans (does it sound familiar to you? Hidden and disguised poverty as I have seen it in Mali, Burkina, Niger, Philippines, India, Senegal, Morocco, El Salvador, Ecuador, Bolivia, Peru.  The instinct to hide our own misery is a kind of modesty, half hypocritical-half shameful, that is repeated across the planet). 

Perhaps Espíritu Santo is the most representative of the four settlements. And not only for its beautiful name, but because the wonderful place it is and the attitude of its inhabitants and settlers, all optimistic, hardworking, compassionate and grieved people. Espíritu Santo is a haven of humanity and certainly it could not be called otherwise! Its inhabitants are settlers

Here I find myself working to fight poverty and to assist the development of these people who are trying to break the infamous "cycle of poverty". But I realize that my work has a lot to do with politics, relationships, risk management and security, other people’s money and local interests. It also has to do with getting to bed every night in good shape and in good mind. 

I write these words because I want to highlight some aspects of our work that I think go unnoticed and, in many cases are precisely the key to success. 

Banks: in this area, a number of banks and financial institutions are and remain a major source of income, due to the poverty of these settlers. Here everyone is indebted, badly indebted. For this reason, one of the main steps to carry out before releasing our MFI is to agree with local banks the "output conditions" of the loans that are currently outstanding and that are actually hindering the settlers’ growth and development. 

Politicians: The residents in the four settlements are about five thousand people. More than half are potential voters. Dealing and negotiating with the local political powers is a key step to guarantee MFI’s launching success and to gain the respect from other institutions. Otherwise, they would condemn the MFI to disaster since political support is essential to surpass vulnerability. 

Guerrilla: Moreover, if you are vulnerable, the more you will be so to protect yourself from the EPP (Paraguayan People´s Army), surprising and dark “guerrilla” acting following invisible instructions with whom there is an obligation to agree any local development work plan. It is mandatory to listen to her opinion and to incorporate some of their suggestions for the sake of the MFI’s present and future and prove that it is “the people’s MFI” that requires a secure and peaceful environment to work properly . 

So, to create an MFI one must previously manage, in an effective way, a range of relationships and agreements of all kinds. And for that, previously too, you must know “who the boss is” in these settlements, which is the balance of power at the community level, how to organize the settlers, who are their leaders. Who they love and who they hate.

Ultimately, this work has taken me back to the origins of microfinance. People outside our industry may believe that creating an MFI is just to properly design a disbursements and refunds plan, like a massive, sophisticated Excel sheet. Not so easy....

Creating an MFI means managing the interests of others and designing a social balance under whose umbrella a number of personal interests will meet. Skillfully manage this multiple agents scenario is in my modest opinion the main skill required for this work. Without this balanced environment, no MFI has the remotest chance of surviving in Espíritu Santo: satisfied bankers; supported politicians and involved guerrillas. Local leaders respected and involved.

That is really the key to success.It´s back to basics.

July 19, 2013

Microfinance back and forth: development potential of migrants

Tags: microfinance, migrants, Spain | by Inma Martín Alegre, Servei Solidari

The economic crisis and the productive return

The organizations - as ours - that are dedicated to working with people of foreign origin living in Spain, have observed in the last two years a new situation concerning this collective. Migrants are now planning to return to their home countries to settle permanently.

The feasibility of a permanent return to the home country takes the lead in an environment of economic crisis in Spain, which has generated a dramatic loss of jobs in sectors where these people were hired mostly (such as construction).

Many of their countries of origin (in which migrants have decisively influenced the impact of remittances) are currently enjoying a phase of economic emergence. Adding personal constraints such as physical separation from family, the opportunity of a new (return) migratory process becomes more than reasonable for them.  

This process implies, indeed, a rearrangement of expectations and the design of a new life project. Many of these people are over 40 years old and present a low-employability profile in a new dynamic and demanding labor market. On the other hand, the same migration project in Spain has involved training and experience in new professional areas. The migrant then decides to create its own source of income:  the productive return is one of the most popular choices.

In these cases, although the person holds savings or some capital from the state program that enables the recovery of the capitalization of unemployment benefits in their country of origin, most of them need external financing.  Without it, the business project they have in mind will not be achievable.    

An opportunity to be grasped by MFIs

The financial systems of these countries conceive credit customers only those who can present a credit profile not only suitable but who can prove a minimum time of residence in the country. This policy also applies in the context of microfinance institutions, which would finance specially those projects which are not starts-up but have been operating at least for one year minimum.  


The migrant is left in a situation, therefore, obliged to necessarily devote the total amount saved to be invested in his/her business if s/he wants to start working immediately after returning home. Otherwise the business project results in a much smaller and precarious initiative than the initial project or the migrant will survive for a while with his savings, waiting to reach the required risk profile for accessing a loan.

The possibility of having this group as clients is an option that some MFIs have begun to value. From the commercial point of view is certainly a large market niche for several reasons. First, migrants can capitalize part of their remittances before returning through transfers to an account in their name. They are an important customer group that would generate revenue in the form of savings. Secondly migrants in Spain have savings to be transferred at the time they return to their home country.The beneficial impact for the migrants is evident as they can start planning their business ventures before returning and consequently organize their personal finances according to the future situation.

For this to happen, MFIs and lenders must be able to establish the necessary processes to disseminate information on the availability of these products and to facilitate and expedite the paperwork.

Migrant organizations in Spain are undoubtedly allied to achieving this ultimate goal as they guarantee capacity to disseminate information to potential recipients.

With the support of new technologies, by promoting the accessibility of management through the use of internet and smartphones such processes would be reasonably simple to implement and would respond finally to a clear need for this large group of people .

June 13, 2013

Open Application Period for the International Master in Microfinance for Entrepreneurship (IMME)

This post has been elaborated by Gonzalo Luzárraga Álvarez, International Master in Microfinance for Entrepreneurship

The International Master in Microfinance for Entrepreneurship a Specific Degree of the Universidad Autónoma de Madrid launches its fifth edition with a new deeper perspective on entrepreneurship and social inclusion, without missing the traditional focus on global microfinance analysis regarding different world regions.

Pioneering and multi-disciplinary, combining Economics, Entrepreneurship, Social Inclusion and Development Cooperation, the IMME offers high quality practical and theoretical training by a top-level international panel of microfinance researchers, practitioners and executives.

The greatest value of the Master lies in its international teaching panel, with over thirty lecturers with recognized experience in the microfinance sector and guest professors from universities all over the world. We highlight the participation of panelists such as John Hatch (father of microfinance in Latin America and founder of FINCA International), Claudio González-Vega (academic expert, professor at Ohio State University) or Micol Pistelli (The Mix Market – Social Performance analyst), among others.


The program covers all aspects of microfinance, focusing on financial and social issues and delving deeply into the differing perspectives and needs of populations with diverse geographic and socio-economic backgrounds.

The course lasts an academic year, from late October to June, with a total of 400 teaching hours, about 50% in Spanish and 50% in English, with classes Monday through Friday from 18:00 to 21:00. In a seminar format, more than 30 professors and microfinance practitioners share their academic, personal and professional experiences, using a debate and discussion approach that enriches the classroom sessions and creates an environment conducive to learning everything about this financial inclusion tool.

The International Master in Microfinance for Entrepreneurship includes in its program a minimum of 150 internship hours with over 40 top-level microfinance institutions in Spain, Europe and the rest of the world collaborating and providing our students with practical experience. Many internships lead to jobs thanks to the experience and knowledge acquired during the Master.

In the actual stage of the microfinance industry, a deep knowledge of the market and the research and development of new innovative products and ideas is really essential to enforce good practices and microfinance in itself. This post-graduated program, specific, up-to-date and heterogeneous, provides the necessary knowledge to build the microfinance future basis.

To enroll in the upcoming 2013-2014 master class, in it’s fifth year, a university degree is required, as are other application documents that can be found on our website along with further information about the program.

For any further information the International Master in Microfinance for Entrepreneurship can be contacted by writing to 

June 13, 2013

Las Sin Banco

Post by Nacho Zavaleta, author of "Las Sin Banco"

In times of financial turmoil we ask ourselves about the actual use of financial Institutions.  At the same time about half of the global population lack access to basic banking services such as opening a savings account, acquire insurance, and least of all, receive a loan. 

Everyday life for these people is complex by living outside the financial system; they cannot plan their cash flows  in advance and have to save enough cash to acquire an asset. For them it is hard to exit the poverty trap.  Microfinance is a tool that meets the needs of millions of people by offering financial services that we take for granted. 

“LAS SIN BANCO” (The Bankless) attempts to introduce the reader about the history, achievements, advantages and complexities of the development of microfinance among the poorest.  The book is full of practical examples and include the major actors in the field.  “LAS SIN BANCO” is a book easy to read that provides the key concepts to discover microfinance as a powerful tool to fight poverty and financial inclusion as an universal right.


Ignacio Zabaleta, CFA, is a finance professor at the MBA business School at the Canary Islands, Spain.  He also works as an independent consultant in microfinance for the past 10 years.

April 8, 2013

Do microfinance & entrepreneurship make sense in Spain?

Tags: microfinance, development, entrepreneurship, Latin America, Spain, microenterprises | by Pilar Vereda del Abril, Ibero-American Foundation for Development (FIDE)

At the Foundation, we do believe our large experience is useful. Fundación Iberoamericana para el Desarrollo (FIDE) is working for longer than 20 years in the field of development cooperation and we consider that we have generated true development from the bottom and from the inside of Latin America. This is the model of development we promote. 

Our global world has been conceived from the top, by accumulating knowledge, technology and the interests of foreign powers, as well as local powers in developing countries. This conception of the world was imposed to some countries and cultures that did not take part of the capitalism’s core because they were just marginal or ex colonies. This model has created economic and social injustice in the world's population where the majority are in poverty and financial exclusion. Considering this situation, we at FIDE have been making proposals to make those majorities able to create their own development from the bottom and from the inside, so they have the ability to change their circumstances, the power to lead their destiny and the opportunity to design their lives.  

We propose a "from bottom" perspective to make them possible to access knowledge and technology dia and, "from the inside", we mean from their own initiatives and their own cultures to achieve its own development in harmony with nature. We make these proposals because we learned it of the majorities, because we have lived with their struggle against poverty and we checked their extraordinary life force to create their own destinies and jobs. Entrepreneurship allows for the change in the circumstances of poverty, creates wealth, and triggers development. 

Over the years FIDE foundation has supported NGO, microfinance institutions and credit unions and has created community banks, using different microfinance tools such as revolving funds, seeds banks, time banks, value chains and microcredit in such a way that from the informal economy - which is marginalization, creation, and at the same time an expression of the dynamism of civil society- three essential figures were born to fight poverty: entrepreneurs, microenterprises and microfinance

FIDE believes that first of all, development depends on the will, effort and talent of the people and their own political, social and productive organizations, besides their natural resources, the market and foreign aid. The key in development is promoting access to education, technical training, socio - cultural assets and also providing finance to allow carry out these ideas.

microentrepreneurs in Latin America

Entrepreneurs have shown that they are the new agents of development, because they produce radical changes in society, politics and culture, in production, in the market and in the territory. Most of them are self-employed and create micro-enterprises in their efforts to escape poverty, and their small income comes from the sale of products, goods or services in uncertain markets. 

Could this development model be of any use in our society? Is the Spanish society aware that entrepreneurship and a participative attitude is needed for developing from the bottom and from the inside? Is our society aware that our crisis provides useful lessons to learn from?  Is our society aware that we cannot afford to fall into the same mistakes of generating a development process from the top and from outside? 

We at FIDE do and wonder why the current policy for entrepreneurship promotion in Spain is not taking into account all the lessons learned that people and NGO have learned through creating and supporting entrepreneurs and using microfinance as a way of funding, participation and development. 

We must remind that starting a venture involves assuming risks, putting ideas into practice, know-how to translate them properly into reality and having the resources (and the ability to manage them properly).

FIDE does that together with our local partners in what we call directional centres or centres for entrepreneurship, where we work to promote entrepreneurial attitude among young people, by encouraging and nurturing ideas and initiatives with market research studies, training people of all ages to make them capable of adequately translate their business plans into initiatives. We carry out technical assessments to help them get the best financing, and we advise and accompany them for at least three years to make their project of life a success and achieve the goals set for their personal development. In that way, we expect to influence Spain’s development by generating work earnings and wealth.

« Next Previous »
Initiative financed by: Initiative financed by AECID
2020 © remEX - red española de microfinanzas en el exterior. All rights reserved. Cookies policy.