Technology, women’s empowerment and rural development are key to improve entrepreneurship in Latin America
The BBVA Microfinance Foundation (BBVAMF) has recently presented its Social Performance Report reflecting its contribution to the United Nations Sustainable Development Goals, which acknowledge the importance of financial inclusion and microfinance for their achievement. The Foundation brings financial products and services closer to vulnerable populations in Latin America, especially to women, to support their development. According to World Bank, almost one out of two women don’t have a bank account.
“Our female entrepreneurs are vulnerable, most of the time they are single mothers who run a business and need an opportunity”, confirms Angélica Albornoz, a credit officer for BBVAMF, as she shares how her job empowers women (SDG 5, “Gender equality”).
According to BBVAMF’s Impact Assessment team, the female entrepreneurs who join the Foundation are more economically vulnerable than their male counterparts. On average, they possess less assets (USD 6,131 versus USD 8,330) and request for smaller loans (USD 696 versus USD 1,096), but their sales are almost the same (USD 1,174 per month, versus USD 1,446). In fact, since 2015, 8 out of 10 entrepreneurs that have crossed the poverty threshold are women.
“We serve more than a million women through financial services: for instance, we offer savings products for their children, microinsurance plans with specific coverage, or group lending models like what we have in Peru for those who live in rural areas”, says BBVAMF’s head of Women’s Empowerment, Laura Fernández Lord.
Indeed, in this country where the financial inclusion rate in rural areas barely reaches 40%, the credit officers that work for BBVAMF access remotely-located microentrepreneurs using their mobile phones, where they can consult the clients’ credit history, progress, and even conduct administrative tasks. All of these, to make their lives easier and not make them incur in travel costs (SDG 10 “Equal opportunities”).
Credit officers working for BBVA Microfinance Foundation brings technology closer to the home-based businesses of entrepreneurs to guarantee better services
“Requests for loans are processed directly by using the app, which is really useful because operations are now quicker and it allows us to adjust clients’ payments according to their current circumstances”, says Charly Mendoza, one of the credit officers from Peru.
This tool turns out to be very efficient in extending services to small farmers who represent almost 40% of the Foundation’s rural clients. Their incomes depend on the quality of their crops, the productive cycle and the weather’s unpredictability, usually determined by climate change.
In Colombia, BBVAMF’s institution offers Crediverde, a loan that helps strengthen farmers’ resilience not only through financial support, but also through quality technical advice so they can apply more eco-friendly farming practices. This loan is part of the Microfinance for Ecosystem-based Adaptation (MEbA) initiative, spearheaded by UN Environment and the German Ministry for Environment (SDG 2, “Zero hunger and sustainable agriculture”).
Aside from these initiatives, the BBVAMF’s Social Performance Report includes other projects with which the Foundation shows its firm commitment to the SDG and its ultimate goal: to end poverty.