Nicaragua is currently the second poorest country in Latin America, after Haiti. In a country where the national economy depends mainly on agriculture, aid for farmers is essential.
‘Fondo para el Desarrollo Local’ (Local Development Fund), or FDL, is a Nicaraguan microfinance institution (MFI) that has been granting since 1997 microcredit facilities in rural areas where there were no financial services available to the local communities. FDL’s clients are small businesses, small traders and service providers, mainly run by women (54%) living in rural areas.
FDL is the result of research carried out by the University of Nicaragua, which wanted to set up a financial programme in the late 1980s. Our colleague, Saúl Castro, then an employee at the Nicaraguan Ministry of Agriculture, followed the progress of the research carefully. In 1999, Alterfin granted FDL its first loan. Despite the difficulties encountered (hurricane Mitch in 1998, the coffee crisis in 2001, the financial crisis in 2008), FDL has stood firm and continued to make progress and contribute towards development in rural areas. “Alterfin has supported us through all the difficulties we have encountered, which cannot be said of all our financial partners.” recalls Julio Flores, general manager of FDL.
Precious microcredit facilities
Today, 61,500 people in Nicaragua receive a loan from FDL. 68% of them live in rural areas and 54% are women. They use their loans to gradually develop their micro-enterprise and provide for the needs of their families. Always moving forward Wishing to expand its relationship with FDL, in 2015 Alterfin decided to join the development fund’s capital. The agreement will be concluded in 2016.
José Luis remains positive
José Luis is an FDL client. He grows corn and beans. “As farmers, we are dependent on external factors like the climate and the market. This year, we had a particularly short rainy season, which made our situation more difficult. Fortunately, FDL understands these problems and adapts to the situation. Thanks to the loan of USD 400 that I received, I can buy fertiliser and feed my family. There are people who live in conditions of extreme poverty but fortunately, we can live decently thanks to the FDL loans and carry on with our farming activities.” he explains.