PIONEERS IN MICROFINANCE: Six Pioneers in Latin America: Álvaro Dávila of Colombia, Joseph Blatchford of the USA, Theodore C. Ning, Jr. of the USA, Mercedes Canalda de Beras-Goico of the Dominican Republic, Clara Serra de Akerman of Colombia, and José Ignacio Avalos Hernánde of Mexico

Microcapital has identified the following six microfinance “pioneers,” individuals who have made long-standing contributions to the evolution and promotion of microfinance practices and/or technology. While not all of these pioneers hail from Latin America, all have been instrumental to the development of microfinance in that region. These pioneers are: Álvaro Dávila of Colombia, Joseph Blatchford of the USA, Theodore C. Ning, Jr. of the USA, Mercedes Canalda de Beras-Goico of the Dominican Republic, Clara Serra de Akerman of Colombia, and José Ignacio Avalos Hernánde of Mexico. Below are short descriptons of the contributions of each:

Álvaro Dávila – Colombia

Since 1986, Álvaro Dávila has served as the president of what is arguably one of the oldest micro-enterprise institutions in the world—the Fundación Social of Colombia. Founded in 1911 by Jesuit priest José Maria Campoamor, the organization embraced pro-poor market-based approaches at a time when paternalism often colored mainstream poverty alleviation strategies, says the Schwab Foundation. Today, it cites two important principles as the basis of its work: (1) workers must function as the primary agents of their own development; and (2) workers must learn the “virtue” of saving. Campoamor created Workers’ Circles and Savings Banks and mobilized thousands of workers to draw interest from their savings accounts in order to fund education, nutrition, housing and other basic personal and community needs. Today, Fundación Social is a non-profit holding company that has set up and financed twelve for-profit companies working in the banking, insurance and/or housing sectors. One of these companies, the Banco Caja Social Colombia (BCSC), is a Colombian microfinance bank founded in 1991 that provides loans, insurance, and savings and funds transfer services. It claims to be the largest provider of financial services and mortgages for low-income clients across not just Colombia but Latin America as a whole. The MIX Market, the microfinance information clearinghouse, gave BCSC a rating of five out of five diamonds with respect to the level of its information disclosure. According to the Schwab Foundation, Fundación Social owns six percent of the Colombian banking market (making it the country’s fifth largest private financier) and serves five million low-income clients across 56 Colombian cities.

Joseph Blatchford – USA

In order to reduce Latin American poverty, Mr. Blatchford went to Venezuela in 1961 to start an organization that would indelibly alter the world of microfinance in the decades to come: ACCION International. According to BancoSol of Bolivia, ACCION was the “first microfinance organization in Latin America” because its volunteers, or “accionistas,” were the first to make the connection (p. 2-3) that informal enterprises could only grow—and thereby lift families out of poverty—if entrepreneurs could access funds subject to commercial interest rates instead of the exorbitant ones charged by community money-lenders. To translate this theory into practice, the accionistas of Recife, Brazil, awarded micro-loans to “solidarity groups” of three to ten people and in four years created or stabilized 1,386 jobs (p. 3). ACCION claims that its Recife program first coined the term “microenterprise” and that those first micro-loans “launched the field of microcredit.” Over the next ten years, ACCION started microfinance programs in 14 Latin American countries and achieved a loan repayment rate of 97 percent. It continued to grow at a tremendous rate: between 1989 and 1995, the value of ACCION’s Latin American loans multipled by more than twenty times. In 1992, ACCION helped create BancoSol, a Bolivian microfinance bank that today serves 80,000 clients and a range of microfinance services. Today, the ACCION network has brought microfinance to Africa, India, Mexico and even the United States.

Theodore C. Ning, Jr. – USA

Mr. Ning, Jr. and his wife Connie founded Friendship Bridge in 1989 after he visited Vietnam as a Battalion Surgeon in the US Army in 1970. The organization was formerly located in Vietnam until 1998, when it moved its operations to Guatemala. Despite its relatively recent start, the organization has achieved strong successes in the country, earning the eightieth spot on the MIX Market’s ranking of the top 100 MFIs operating in Latin America and the Caribbean. A microfinance information clearinghouse, the MIX Market gave Friendship Bridge a five out of five diamond rating in terms of its information disclosure. At the end of 2007, the MFI was serving 17,181 borrowers, and it maintained a gross loan portfolio of USD 3.6 million. It earned a 17.41 percent return on its assets and achieved a total debt-equity ratio of 49.14 percent. In 2007, Mr. Ning, Jr. started another non-profit organization, Starfish One by One, in order to promote children’s education in Guatemala and Mexico.

Mercedes Canalda de Beras-Goico – Dominican Republic

Ms. Beras-Goico is the Founder and Executive Director of the Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM), a Dominican bank founded in 1982 to provide microfinance services and training to Dominican women. In 2008, ADOPEM earned the 26th spot on the MIX Market’s list of the top 100 MFIs operating in Latin America and the Caribbean. The MIX Market also gave the organization five out of five diamonds in terms the level of its information disclosure. At the end of 2007, ADOPEM was serving 66,286 borrowers and possessed a gross loan portfolio of USD 28.5 million. Its total debt-equity ratio was 156.97 percent, and its return on assets was 7.37 percent. Ms. Beras-Goico also serves on the board of the Ecumenical Church Loan Fund (ECLOF), an international ecumenical microfinance organization.

Clara Serra de Akerman – Colombia

Ms. Serra de Akerman is a founding member of the Fundación Women’s World Banking (WWB Colombia), a Colombian microfinance institution established in 1982. She has also served as the organization’s president since 1992. During the MFI’s 28 years of existence, it has received support from the Interamerican Development Bank (IDB), the International Finance Corporation (IFC), the Consultative Group to Assist the Poor (CGAP), and a host of other microfinance-focused organizations. The MIX Market, a microfinance information clearinghouse, rated WWB Colombia the fourth best MFI in Latin America and the Caribbean for 2008 and gave it a rating of five out of five diamonds in terms of transparency. By the end of 2007, the organization had 218,191 active borrowers and a gross loan portfolio of USD 220 million. Total debt-equity was 340.4 percent, and the firm achieved a 6.17 percent return on its assets. Ms. Serra de Akerman has also served as a consultant to a number of microcredit organizations in Mexico, Brazil, Argentina, and Uruguay, and she has worked with the Colombian government to revise Colombian microfinance policies. She has also co-authored a microfinance book, The Miracle of a Working Class Economy: Microfinance, a Development Vehicle, which was published in 2004.

José Ignacio Avalos Hernánde – Mexico

Mr. Avalos has two careers: he runs a pharmaceutical and cosmetics company based in Mexico City, and he has been instrumental in creating non-profit organizations for the purpose of relieving Mexican poverty. In 1982, Mr. Avalos started Gente Nueva, an organization that aims to create links between civil society, government, and the private sector for the purpose of drawing young people into social action and increasing their awareness of Mexico’s marginalized communities. To date, the organization has grown to service projects in Argentina, Brazil, Chile, Colombia, Italy, Spain, and Venezuela and has spawned 23 other non-profit organizations. Mr. Avalos also started “Un Kilo de Ayuda,” a campaign for selling food and other essential household products at competitive prices and using the proceeds to fund social and nutritional programs for Mexican children. For the field of microfinance, Mr. Avalos created in 1990 the Compartamos Banco, a Mexican microfinance lender, to fund “solidarity groups” of low-income entrepreneurs without access to traditional financial services. The bank grew at a tremendous rate: it had assisted more than 17,000 borrowers by 1995 and more than 137,000 by 2002. At the end of 2007, Compartamos Banco possessed a gross loan portfolio of USD 377.8 million and achieved a 20.02 percent return on its assets and a 45.66 percent return on its equity. The MIX Market, a microfinance information clearinghouse, rated the Compartamos Banco five out of five diamonds in terms of its transparency.

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