Colombian business organization Federación Nacional de Comerciantes (FENALCO) has agreed to insure all of the education loans issued by Cresca Creditos, a start-up microfinance institution based in Colombia. Cresca will pay FENALCO a fee of four percent for each retail loan, which FENALCO will guarantee for up to USD 3,000. Each microloan covers a full university semester and has a rate of 36 percent per annum. The deal lowers the risk for investors in Cresca, as Cresca CEO Luis Arango tells MicroCapital, “If our clients default on their monthly payment, we will get paid by FENALCO within seven business days of the claim.”
Cresca has an existing agreement with one educational institution to offer loans to its students and intends to partner with 12 other universities once funding is in place. Cresca is also targeting to add business loans, insurance and leasing services to its offerings in the future. Cresca is offering investors fixed interest payments of 18 percent per annum for 5 years.
For further information, you may contact Luis Arango at l.arango[at]crescacreditos.com.
By Kristha Abores, Research Associate
About Cresca Creditos:
Cresca Creditos is a start-up microfinance institution based in Colombia that provides education loans to poor students. It is also targeting to offer business loans, insurance and leasing services in the future. Financial information on the organization is not available.
About Federación Nacional de Comerciantes (FENALCO):
Founded in 1945, Federación Nacional de Comerciantes (FENALCO) is a business organization based in Colombia. It seeks to improve the productivity of its members and to contribute to the progress of the Colombian economy through the support of initiatives intended to help poor people.
Sources and Additional Resources:
[1] Information submitted to MicroCapital by Cresca Creditos
MicroCapital.org article, December 16, 2011, “MICROCAPITAL BRIEF: Vittana Receives $250k Grant from Google to Expand Online Lending for Education Microfinance,” https://www.microcapital.org/microcapital-brief-vittana-receives-250k-gra…
MicroCapital Universe Profile: Cresca Creditos, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Cresca+Creditos
MicroCapital Universe Profile: Federación Nacional de Comerciantes (FENALCO), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Federaci%C3%B3n+Nacional+de+Comerciantes+%28FENALCO%29
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