55% of low-income entrepreneurs who sign up to a micro-loan raise their income

Financial inclusion plays a key role in reducing poverty. So declares the United Nations in its Agenda 2030 for Sustainable Development, including access to financial services in several of its Sustainable Development Goals, as a way to make progress towards the ultimate aim of this route map: ending poverty in all its forms. The BBVA Microfinance Foundation is aligned with this purpose and has been working for twelve years to support the development of people with small businesses but without the economic resources they need to take them forward.

“Financial support boosts the talent and hard work of these entrepreneurs. It is crucial because it provides stability, encourages growth, reduces poverty and achieves a more equitable distribution of resources and capacities,” concluded Javier M. Flores, BBVAMF’s Chief Executive Officer, during International Poverty Eradication Day on October 17. The Foundation measures its social performance to monitor the progress of the more than 2 million entrepreneurs whom it serves in five countries in Latin America, and to ensure that all its efforts are focused on meeting that purpose – the development of these micro-entrepreneurs. The latest Social Performance Report “Measuring what really matters” notes that in 2018, 55% of borrowers raised their income, and that their assets and sales grew by an average of 23% and 17%, respectively. Furthermore, 34% broke through the poverty line barrier after two years banking with the institution.

“We put entrepreneurs at the center of all our work, providing financial products and services that range from microloans to microinsurance policies, and we advise them so that they get ahead,” explained Javier M. Flores. Over 1.3 million people have received financial education since the SDGs were formulated in 2015, and they also receive technical training. Since 2016, the BBVAMF has been granted consultative status on the United Nations Economic & Social Council (ECOSOC), for its contribution to development through microfinance.

In the words of the BBVAMF’s CEO, “the entrepreneurs we serve are the best example of the potential of microfinance. Take Yamile Salazar, for example. She started from scratch: she had a difficult childhood, her mother earned less than EUR 30 a month, and spent 90% of that on rentBut from her love of sewing she came up with an idea for her business.” Now, after 10 years with the Foundation, Yamile has a team of 90 people working for her and sells children’s clothes across the whole country. “When I wanted to ask for a loan for my business, I knocked on the doors of many banks, but they slammed them shut on me until I found out that Bancamía (BBVAMF’s institution in Colombia) would believe in me. They opened up a window on the world,” she told an audience in Madrid recently.

Around 184 million people still live in poverty in the region, according to the Economic Commission for Latin America and the Caribbean (ECLAC). Circumstances that affect women, young people and those living in rural areas to a disproportionate degree. That is why the Foundation is particularly committed to women, who account for 60% of the people it serves. Thanks to digitalization, the Foundation reaches remote areas, even where there is no internet coverage, so that entrepreneurs do not have to waste time and money on travel. To increase the resilience of small-scale farmers to climate change and encourage the use of eco-efficient measures and techniques to cope with that change, it has built an environmental approach into its strategy.