Ecuador-based Cooperativa de Ahorro y Crédito Jardín Azuayo (CJA), with support from IDB Invest, a member of the Inter-American Development Bank (IDB) Group, is issuing bonds to raise a total of USD 20 million. The Netherlands-based cooperative Oikocredit and IDB Invest each have committed to purchase half of the bonds, which mature in four years. CJA intends to use the proceeds from the Senior Social Bond of Diversity and Inclusion to expand its financial services for micro-, small and medium-sized enterprises (MSMEs), particularly those “led by and/or owned by Indigenous people, migrants, women, low-income people and/or people with low levels of education.” CJA projects the average microloan funded by the bonds to be in the amount of USD 7,000 with a term of four years, and the average loan for other enterprises to be USD 40,000 with a term of five years. In support of the bond issue, IDB Invest has agreed to provide CJA technical assistance regarding the use of psychometric tools for “evaluating and improving credit decisions towards women and underrepresented groups and pay a results-based monetary bonus tied to reaching women entrepreneurs, including Indigenous and migrant women.”
CJA is a cooperative that was founded in 1996 in the province of Azuay. It provides financial education and financial services such as deposits, loans, insurance, debit cards, payroll processing and bank transfers. During the first quarter of 2023, it generated return on assets of 0.21 percent and return on equity of 1.67 percent on total assets of USD 1.47 billion. As of December 2022, it served 665,000 members via 69 offices in eight provinces.
Oikocredit was established in 1975 and is active in Africa, Asia, Latin America and the Caribbean. As of March 2023, the coop reports capital of EUR 1.0 billion (USD 1.1 billion) outstanding to about 500 partner organizations active in financial inclusion, agriculture and renewable energy. For the first quarter of 2023, it reported a return on equity of 1.1 percent and a return on assets of 1.0 percent. During 2022, it reports issuing new disbursements of EUR 409 million (USD 448 million).
IDB Invest was founded in 1986 and aims to promote economic development and financial inclusion in Latin America and the Caribbean through private sector investment. During 2022, the institution disbursed USD 4.5 billion in new investments, ending the year with a portfolio of USD 6.5 billion deployed in 25 countries.
IDB Group is active in Latin America and the Caribbean. In addition to IDB Invest, it comprises IDB, which provides “financial and technical support for countries working to reduce poverty and inequality,” and the IDB Lab, which tests models for facilitating growth that is inclusive of “vulnerable people affected by economic, social or environmental factors.”
By James Stevenson, Research Associate
Sources and Additional Resources
Oikocredit press release
https://www.oikocredit.coop/k/en/n2613/news/view/366077/9049/oikocredit-idb-invest-and-cooperativa-jardin-azuayo-announce-groundbreaking-diversity-and-inclusion-social-bond.html
CJA homepage
https://www.jardinazuayo.fin.ec/
IDB Invest description of CJA bond
https://www.idbinvest.org/en/projects/social-bond-diversity-and-inclusion-cooperativa-jardin-azuayo
Previous MicroCapital article on IDB Invest, IDB Group
https://www.microcapital.org/microcapital-brief-fsps-in-ecuador-to-evaluate-role-of-bias-in-financial-access-for-women-led-msmes-with-support-from-idb-invest-rfd/
Oikocredit homepage
https://www.oikocredit.coop/
Oikocredit quarterly financial report, March 2023
https://www.oikocredit.coop/k/en/n171/news/view/363866/326685/q1-2023-quarterly-report-a-positive-start-to-the-year.html
Previous MicroCapital article on Oikocredit
https://www.microcapital.org/microcapital-brief-oikocredit-lends-3-3m-to-witti-finances-to-support-smes-in-cote-divoire/
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