2,500 million adults in the world do not own a bank account.
- This alliance will serve to combine efforts and develop shared actions in the field of microfinance to enable population segments that commonly have no access to financial services to effectively use the economic opportunities available to them, mitigate variations in consumption, and navigate unexpected situations more efficiently.
- Entrepreneurship is key for generating jobs and development, particularly in less advanced countries. According to data from the World Bank, 77% of people who have risen up out of poverty have done so thanks to individual initiative, and financial exclusion is one of the primary obstacles.
- 5 million adults in the world do not have a bank account.
- The Spanish Cooperation Agency is estimated to have contributed through its loans to financing over 2.5 million microenterprises, located principally in Latin America, Africa and Asia.
- The goal of the Spanish Cooperation for Microfinance is to assist and support the processes undertaken by national actors that are designed to improve the offer aimed at population sectors that have traditionally been insufficiently and poorly served. It has done important work in countries such as Bolivia, Cambodia, Colombia, Ecuador, Morocco and Peru.
- The BBVA Microfinance Foundation is currently the philanthropic initiative with the greatest social impact in Latin America. Since its creation in 2007, it has delivered loans to 4.4 million underprivileged entrepreneurs for a value of 6.058 billion dollars.
Gonzalo Robles, general secretary for International Cooperation in Development at the Ministry of Foreign Affairs and Cooperation, and Manuel Méndez del Rio, Chairman of the BBVA Microfinance Foundation, signed a framework collaboration agreement aimed at combining forces and cooperating in a concerted and coordinated project to develop initiatives in the sphere of microfinance to ensure that the population sectors traditionally lacking access to financial services can effectively use the economic opportunities they have available, alleviate variations in consumption and navigate unexpected situations more efficiently.
The general secretary for International Cooperation in Development highlighted that the aim of the Spanish Cooperation for Microfinance is to assist and support the processes undertaken by national actors that are designed to improve the offer tailored to population sectors that have traditionally been insufficiently and poorly served. As examples of these processes –which have been supported by Spain– it is worth mentioning the cases of Bolivia, Cambodia, Colombia, Ecuador, Morocco and Peru, which are now models of financial systems that are dedicating greater and better attention to the needs of commonly excluded segments of society. “It is also estimated that the accumulated number of microenterprises funded so far since the start of the actions of Spanish Cooperation for Microfinance is over 2.5 million”.
“Spain has high potential in this cooperation sector, and we consider the most effective approach is to join forces with others to work in this area, thereby extending our scope and efficiency”.
According to the Chairman of the BBVA Microfinance Foundation: “We are convinced this public/private alliance will allow us to coordinate our efforts and achieve greater scope. Both partners consider entrepreneurship to be the key to generating employment and development, and particularly in less advanced countries. However 2.5 billion people currently continue to be excluded from financial services, which limits their opportunities”.
“To achieve our objective, the BBVA Microfinance Foundation has developed a methodology –Productive Finance– which it considers is the most effective and sustainable course for intermediation in the fight against poverty” says Méndez del Río.
“This specialty is based on the provision of financial products and services, advice and training for low-income individuals to enable them to develop their businesses, and is geared to achieving the customer’s success and advancement through the sustainable generation of surpluses”.
“Since our foundation in 2007, the BBVA Microfinance Foundation has helped 4.4 million low-income entrepreneurs develop their businesses, and has delivered over $6.058 billion in productive loans. 96% of our customer have been successful in the business they have undertaken”, concluded Méndez del Río.
About the Spanish Cooperation for Microfinance
Spanish Cooperation for Microfinance is a public body with long experience in the microfinance and financial inclusion sector, through providing loans to financial institutions –essentially local, and at both the first and second tiers (first-tier institutions serve the public directly, whereas the second tier serves the first tier). The Fondo para la Concesión de Microcréditos (Fund for Granting Microcredits – FCM), created in 1998 and integrated since 2011 in the Fondo para la Promoción del Desarrollo (Fund for the Promotion of Development – FONPRODE) represents a basic instrument for advancing the sector in developing countries.
Since 1998 to the present day, 136 direct loans have been approved for a total amount of 774,940,396 euros. These figures have made the Spanish Cooperation Agency the number two world donor in 2008 and 2010 at the bilateral level after Germany, and the fourth including the international financial development institutions, after the German Development Bank (KfW), European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), the private branch of the World Bank, as revealed in the CGAP 2009 Microfinance Survey and the CGAP 2011 Cross-border Funder Survey.
Considering direct financing, the portfolio of FONPRODE on 12/31/2013 consisted of an average loan of USD $1,385 (USD $529 in the sub-Saharan region) to 584,547 recipients, mainly women (59%), residents in rural (50%) and urban or periurban (50%) areas in 24 countries (directly), and engaged in microenterprises in the commercial/services (68%) and farming/fishing (23.6%) sectors. In terms of financial inclusion it is worth noting that 58% of the credit institutions also offer deposit services. “We estimate that the accumulated number of microenterprises funded since the start of the actions of Spanish Cooperation for Microfinance to the date of the report is over 2.5 million”.
About the BBVA Microfinance Foundation
Created in 2007, the Foundation promotes sustainable and inclusive economic and social development for disadvantaged sectors of society by means of Productive Financing, its specialty and methodology.
The BBVA Microfinance Foundation currently serves 1.5 million low-income individuals, of which 85% are poor or vulnerable, with an average per capita income of four dollars, 52% of whom have no education or only basic education, and 61% of whom are women. 96% of its customers have been successful in the businesses they have undertaken.
It is currently present in seven countries in Latin America through eight microfinance institutions: Banco de las Microfinanzas Bancamía, (Colombia), Financiera Confianza (Peru), Banco Adopem (Dominican Republic); Fondo Esperanza and Emprende Microfinanzas (Chile); Contigo Microfinanzas (Argentina); Microserfin (Panama); and Corporación para las Microfinanzas (Puerto Rico).
In addition to its main activity, in which it is the leading operator in number of customers with an individual methodology in the region, the Foundation carries out a range of philanthropic initiatives to promote the development of the microfinance sector, particularly in the area of human capital and corporate governance.