EXPERIENCES AND GOOD PRACTICES IN MICROCREDIT PROGRAMS FOR THE POOR
ORGANIZACIÓN DE DESARROLLO EMPRESARIAL FEMENINO.
INTRODUCTION • ODEF STARTED OPERATING IN 1985 • INITIATED CREDIT PROGRAM IN 1989 • BECAME SELF-SUFFICIENT IN 1996 • 9,200 ACTIVE CUSTOMERS • ACTIVE PORTFOLIO US$ 5.2 MILLION • 60% OF OUR CUSTOMERS ARE POOR
ODEF CREDIT PRACTICES HAVE NOT ALWAYS BEEN GOOD PRACTICES. EXPERIENCE AND EXCHANGES HAVE ENABLED US TO DESIGN GOOD PRACTICES AND STRATEGIES
TWO STRATEGIES FOR SERVING THE POOR WITH CREDIT . • START WITH CREDIT. • In urban and marginal urban areas • Finance known activities, reinforcing through training.
START WITH TECHNICAL ASSISTENCE. In the rural area for agricultural loans Teach techniques and forms of production, going on to provide credit support later.
Good practices and experiences starting with credit (First strategy) • Begin financing activities that the people already handle. • Start off by financing small sums. • Training in loan management, self-esteem and gender is essential. • In the short term make social investment loans that permit improvements in their quality of life.
Examples of successful cases using this strategy. • Banco Comunal de La Mujer. (Women’s Community Bank)
• Activity: Lime Production – 15 Members
– – – – –
First loan $200.00 x person (1997) Present loans $2,700.00 x person. Monthly sales at the beginning $400.00 x person Present monthly sales $3,125.00 x person ($2,725.00 increase in monthly sales)
Banco Comunal Pito Solo (Pito Solo Community Bank) • Activity: Fish breeding • 17 Members • First loan $176.00 x person (1999) • Present loan $ 1,125.00 x person • Monthly sales at the beginning $2,823.00 • Present monthly sales $7,058.00
• ($4,235.00 increase in sales)
C.I. Santos Chacón • Activity: Handicraft Manufacture. – First loan $176.00 (1993) – Present loan $1,112.00 – Monthly sales at the beginning $294.00 – Present monthly sales $2,647.00 – ($2,353.00 increase in sales)
C.I. Dilcia Odilia Guzmรกn โข Activity: T-shirt Factory *First loan $ 90.00 ( 1997 ) * Present loan $625.00 * Monthly sales at the beginning $ 150.00 * Present monthly sales $ 3,350.00 ($3,200.00 increase in sales)
Good practices and experiences starting with technical assistance in rural areas • Equip (Invest in) communities to be able to receive credit. • Training and technical assistance to improve productivity and diversify production. • 3 to 5 years to accomplish this.
Good practices .......... (pilot program) • Do not finance agriculture through payment at maturity • Finance the farm and not the crops. • Do not expect them to become independent immediately. • Continue with training in aspects of business administration.
Examples of successful cases in the rural area using the second strategy. • Banco Comunal : Los Naranjos (Los Naranjos Community Bank) – – – – –
15 member families Initial loan $176.00 ea. ( 2001) Present loan $364.00 ea. Initial crops: 3 crops Present crops: 7 crops
Examples of successful cases... • Banco Comunal 1 de Noviembre (1 de Noviembre Community Bank) – – – – –
10 member families Initial loan $153.00 ea. ( 2000) Present loan $382.00 Initial crops : 2 crops Present crops: 6 crops
this presentation was commissioned by the poverty reduction and social protection network of the regional policy dialogue for the iv hemisph...