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The MIF contributes to the expansion of microfinance services to rural areas in Nicaragua

Feb 13, 2013

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, has approved a grant of $362,000 to support the Foundation for Rural Socio-Economic Development (FUNDESER) of Nicaragua in becoming a regulated financial institution that would primarily serve customers in rural areas, including micro, small and medium-sized businesses and the agricultural sector. FUNDESER has decided to transform its operations and become an institution subject to the regulation and supervision of Nicaragua’s Superintendency of Banks and Other Financial Institutions (SIBOIF), which will allow it to expand and deepen its impact in terms of bringing its financial services to low-income communities.

Between the second half of 2008 and the end of 2010, Nicaragua’s microfinance sector experienced the most difficult business climate in its history. This, combined with the eruption of the global financial crisis and the growth of the “Nonpayment Movement,” brought about a fundamental change in the sector’s environment. However, since 2011, the sector has been recovering at a rapid pace, and a number of microfinance institutions are once again showing promising indicators. Among these is the Foundation for Rural Socioeconomic Development (FUNDESER).

The project will strengthen the skills of the institution’s staff, assist in complying with SIBOIF’s regulations and standards, and help improve the institution’s technological capacity.

About the MIF

The Multilateral Investment Fund (MIF), funded by 39 donors, supports private sector-led development benefitting low-income populations and the poor - their businesses, their farms, and their households. The aim is to give them the tools to boost their incomes: access to markets and the skills to compete in those markets, access to finance, and access to basic services, including green technology. A core MIF mission is to act as a development laboratory - experimenting, pioneering, and taking risks in order to build and support successful micro and SME business models. More information at www.fomin.org  

About FUNDESER

FUNDESER was established in 2000 on the basis of experiences and projects in development and rural credit of the Catholic Church and Caritas Nicaragua, founded in 1993. Today it is Nicaragua’s third largest microfinance institution (MFI) in number of customers, and the second in portfolio size, with over $14 million in loans, more than 22,000 active clients and an average loan size of about $500. With 77% of its portfolio based in rural areas, FUNDESER is the MFI with the largest rural portfolio in the country. It operates using both individual and group credit methodologies and has an extensive geographic coverage nationwide.

Approved amount: US$362,000.00

Approval date: January 18, 2013

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