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News tagged as "rural microcredit"
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.

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Initiative financed by: Initiative financed by AECID
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