Help 1,600 Nicaraguan Farmers Rise Out Of Poverty

Jessica is 26 and recently opened a bakery with her mother at her mother's house with a loan and technical assistance from COOPEFACSA.  She has been able to employ 5 permanent workers as the result of her loan.  She would like to use future loans to help expand her bread baking business.  Working with COOPEFACSA and receiving access to credit has greatly improved the lives of her children and community.

Jessica has one of the few group-based or "solidarity" loans with COOPEFACSA.  Solidarity lending is a lending practice where small groups borrow collectively and group members encourage one another to repay. It is an important building block of microfinance that uses social capital to both support the poorest of the poor and encourages timely repayment.  Often, because of the trust built between members of the group, if one member is unable to make a scheduled repayment, members of the group step up to help the other members.

The poorest of the poor, those who would take out the smallest loan amounts, often are the ones who take the most advantage of solidarity loans. While COOPEFACSA practices mostly individual lending for business activities, in July 2013, the group began to implement solidarity groups of 3 to 6 members in order to reach borrowers with smaller loans than they traditionally have been involved with. These group members are paying gradually for their membership through a deduction of $10 per each lending cycle of the solidarity group. Their goal is to have 20% of their portfolio in solidarity groups by the end of 2016.

Thanks for your continued support in providing opportunities to the working poor of Nicaragua. Until next time, and in service,

- Zac

Links:

• Full Profile of COOPEFACSA