Source: Inter-American Development Bank
Article available here.
The Inter-American Development Bank’s Multilateral Investment Fund announced today the approval of a US$200,000 grant and US$690,000 in reimbursable financing for a community-based system of rural microfinance in northwestern Guatemala.
The project aims at improving the socioeconomic conditions of microentrepreneurs and low-income individuals living in rural areas in the Department of Totonicapán by expanding the supply of microlending services. The project will strengthen the rural microfinance model promoted by the Asociación de Cooperación para el Desarrollo Rural de Occidente [Cooperative Association for the Rural Development of the West] (CDRO).
The initiative will benefit at least 560 low-income individuals, the majority of whom are indigenous people living in Totonicapán’s rural communities, whose individual financing needs range between US$250 and US$10,000, and who are principally engaged in microenterprise activities. Their activities include agriculture, raising animals, trade, services and manufacturing. These individuals generally have unmet basic needs and an annual average net income per capita of between US$800 and US$2,000.
“The combination of technical cooperation and non-reimbursable financing will help diversify the credit products available to these rural microentrepreneurs,” said MIF project team leader Fernando Campero. “Besides improving and expanding its current loans to micro and small entrepreneurs, with the project’s support, CDRO will develop new financial products for low income housing and for new entrepreneurs. The project will also help CDRO strengthen its network of community-based rural agencies and improve its risk management.”
The Cooperative Association for Rural Development of the West (CDRO for its Spanish acronym) will be the program’s executing agency and will provide $262,000 in counterpart funds.
CDRO, which carry out the project and provide the equivalent of US$262,000 in counterpart resources, is a Maya-Kiché community organization comprising grassroots groups and community development organizations. It provides a range of socioeconomic development services to rural populations in Totonicapán and works to strengthen the social capital of the communities in which it operates. To ensure that rural microentrepreneurs have continual access to financing it has established a program known as the Community Financing Network (REFICOM), which it runs as an independent cost center.
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