Their relationship banking model makes it easier for BBVAMF to reach the most vulnerable segments in five countries where it works, and because of this, governments have chosen these leading microfinance institutions to channel their subsidized relief funds resources destined to help the groups most affected by COVID-19.
The six institutions of the BBVA Microfinance Foundation (BBVAMF) have carried out different projects and initiatives to support people living in vulnerable conditions, and those who are now more exposed to poverty and social exclusion due to the pandemic.
Their relationship banking model makes it easier for BBVAMF to reach the most vulnerable segments in five countries where it works: Colombia, Peru, Dominican Republic, Chile and Panama, and because of this, governments have chosen these leading microfinance entities to channel their subsidized relief funds resources destined to help the groups most affected by COVID-19.
In Colombia, Bancamía is distributing subsidies under the Ingreso Solidario program, to more than 135,000 Colombians without access to the financial system, and who, otherwise, wouldn’t be able to access this economic support. To make this possible, the institution has implemented a strategy consisting of mobilizing its 1,100 microfinance officers to go house-to-house using a tablet, opening bank accounts to be able to distribute the aid. This effort has implied a rigorous tracking of the beneficiaries because they were unregistered until now.
Likewise, Banco Adopem in the Dominican Republic has disbursed public aid to more than 3,100 entrepreneurs, specifically to independent workers who have been unable to continue their productive activities due to the health measures applied nationally.
Loans to reactivate small businesses
Aside from these types of aid, the Foundation’s institutions have been granted public funds to give out loans with favourable terms and help reactivate the business community among low-income entrepreneurs.
The most notable case is that of Financiera Confianza in Peru, which the Support Fund for Micro and Small Enterprises allocated 147.5 million PEN (more than 36 million Euros) . It has also been granted 10 million PEN (approximately 2.5 million Euros) from the Reactiva Peru program. Both are public sector initiatives that are allowing the institution to serve more than 17,000 entrepreneurs so they can launch their businesses once again.
The same is true for Colombia and Chile, where the Foundation’s microfinance institutions (MFI) can access public funds to reactivate microenterprises, and consequently, the economy.
For me, this aid was amazing, because we were already needing it”
Furthermore, in Chile, Fondo Esperanza (FE) carries out various projects to help the most vulnerable cope with the situation. In the case of Chile Comparte, together with local associations, the institution takes food and other basic necessities to those most affected by the pandemic. To date, more than 6,000 relief goods have already found their way to nearly 15,000 people. For Juan Arenas, a FE client, it was surprising to receive these goods, which according to him, “came just at the right moment.” “For me, this aid was amazing, because we were already needing it. It helps us survive”, he assures. FE also makes it a point to build support networks among different organizations so that the women clients it serves can still push on with their livelihoods even if they have ceased generating income.
The BBVA Microfinance Foundation institutions have also incorporated digital solutions to these efforts: more than 4,500 microfinance officers have been able to keep in touch with their clients despite the social distance. Undoubtedly, technology has been an important ally for the more than 2.2 million entrepreneurs served by the Foundation, given that it has also facilitated buying and selling products through social media.
One of the lessons from this crisis is the adaptive capacity of these entrepreneurs, who, in spite of being more exposed to its effects, are able to face the “new reality” firmly convinced that effort and perseverance are key to move forward.