The award recognizes Fondo Esperanza’s work to support particularly vulnerable sectors like prison inmates and people who live on the streets by helping them start up enterprises that enable them to gain a living, representing a second chance for them and their families. The bank does this by delivering microloans, training and support networks in their enterprise group.
The “Segmentos Excluidos” program (Excluded Segments) came third in the Financial Literacy Award 2016, in the category “Support for Financial Inclusion”, granted by the Superintendency of Banks and Financial Institutions (SBIF) and the University of Chile, for its role as “an important and innovative project that seeks to reinforce the trust between the social development institution and its entrepreneurs”.
This prize promotes financial literacy and inclusion in the country and underlines the importance of financial and economic literacy. “We have a range of notable public and private initiatives that are engaged in a joint effort to encourage inclusion. Projects that are a good example of this, and which aim to inform and educate on this subject, include Fondo Esperanza, with its all-round microfinance service in prisons”, said Michelle Bachelet, President of Chile, when she presented the award.
“Segmentos Excluidos” exemplifies Fondo Esperanza’s mission to reach out to vulnerable groups with no access to opportunities in the formal banking system, thus improving their quality of life and that of their families and communities. To enter for the award, Fondo Esperanza submitted a video testimony from one of the participants in the “Segmentos Excluidos” program , in which the entrepreneur Roberto Rosas, an inmate in the Osorno penitentiary who makes wooden craft items and furniture, talked about the importance of this support for him, his family and his companions. “My quality of life has improved substantially thanks to Fondo Esperanza. I can now maintain my family and I hope to be able to have a small business when I have served my sentence. My fellow inmates and I are making progress and showing that it is possible to get ahead”, he says.
The program began in the Osorno penitentiary in 2013 when 17 inmates took on the challenge of forming a group enterprise and using their manual skills to become entrepreneurs. For them it represented a chance to change their future, to contribute to the economic development of their families and prove that even though they are serving their sentence, they can get ahead. Fondo Esperanza supported them with a methodology that combines microloans, training, and support networks.
The entrepreneurs’ motivation and their excellent results have led the project to be extended to the penitentiaries of Puente Alto (with two community-district banks), Colina and Limache. In addition, in 2015 a community-district bank was set up in Santiago to help people who live on the streets.
According to Mario Pavón, general manager of Fondo Esperanza, “This award encourages us to continue working and believing in people who have been excluded from the financial system. The service Fondo Esperanza provides these groups not only allows them to work as entrepreneurs, but also gives them the tools for their future reinsertion in society”.
“We are generating support and second chances, and genuinely promoting social reinsertion. This award allows us to continue improving and extending our intervention network, as there are many potential entrepreneurs deprived of their freedom or homeless who have need of us”, said Verónica Toro, the institution’s head of Community-District Banks.
According to Scarlett Sandoval, Advisor at the community-district bank “Unión, Esfuerzo y Trabajo” in Osorno, this project represents a challenge at both the work and personal level: “This is a major undertaking, as its takes place in a different kind of physical space. It’s not the same as the community-district banks where the entrepreneurs have no restrictions. At the personal level this means sharing and helping in their rehabilitation so they feel part of society”.