NICARAGUA: POST COMMENTS ON OPIC FINANCING FOR GLOBAL PARTNERSHIP MFI FUND

UNCLAS MANAGUA 000314 SIPDIS SIPDIS STATE FOR WHA/CEN AND WHA/EPSC STATE PASS TO OPIC - RGREENBERG USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR E.O. 12958: N/A TAGS: EINV EAID EFIN NU SUBJECT: NICARAGUA: POST COMMENTS ON OPIC FINANCING FOR GLOBAL PARTNERSHIP MFI FUND REF: STATE 22448 ¶1. (U) Reftel requests post's comments regarding OPIC's direct loan to Global Partnerships Microfinance Fund 2008 (The Fund). The Fund has an established track record working with many of Nicaragua's microfinance institutions (MFIs). We are not aware of any derogatory information on the Fund or its operations in country. There are over 300 MFIs registered in Nicaragua, managing a portfolio of over USD 400 million. While two institutions dominate half of this market, about forty, mostly located in rural areas not reached by formal banks, provide essential financial services to Nicaragua's poorest producers. ¶2. (U) All four Nicaraguan MFI institutions being screened by the Fund for participation in the program are well established in Nicaragua. All are members of the National Association of Microfinance Institutions (ASOMIF) and have received funds from international institutions, including the Ford Foundation, USAID, and the Inter-American Development Bank. Post is not aware of any derogatory information regarding these institutions. Paragraphs below summarize information on each MFI. ¶3. (U) Fondo del Desarrollo Local (FDL): Founded by the Jesuit University Universidad Centroamericana, FDL is one of the largest NGO MFIs in Nicaragua. It focuses primarily on providing credit to the rural sector through 28 branch offices thorough out the country. FDL's lending focuses on promoting entrepreneurs, with half of the funds going to agricultural projects. In 2006 FDL had a gross loan portfolio of USD 53 million, total assets of USD 66 million, and 72,000 active borrowers. Web site: www.fdl.org.ni ¶4. (U) Cooperativa 20 de Abril: This is a multi-service cooperative focused exclusively on offering services in the municipality of Quilali in the department of Nueva Segovia. The cooperative has four principal activities: commercialization of agricultural goods, micro-credit, savings, and a co-op owned store. It is the only institution in Quilali that offers savings accounts and the store is the only outlet in Quilali for many consumer and agricultural goods. Of the loan portfolio 80% goes to agricultural activities. In 2005 the Cooperative had a gross loan portfolio of USD 5.6 million, total assets of USD 6.4 million, and 5,700 active borrowers. E-mail: coop20ab@ibw.com.ni ¶5. (U) Fundacion para la Promocion y el Desarrollo (PRODESA): PRODESA is headquartered in Juigalpa and primarily operates in the southern and eastern sides of Lake Nicaragua and the western part of the southern Atlantic Coast region. In many remote towns, PRODESA is the only financial institution of any kind, including MFIs. PRODESA's loans go to agriculture, livestock and housing mortgages. In 2005 it had a gross loan portfolio of USD 14.7 million, total assets of USD 16.8 million, and 16,000 active borrowers. E-mail: prodesa@ameri-cble.com.ni ¶6. (U) Programas para la Mujer (Pro Mujer): Pro Mujer is an international development organization with vast experience in several Latin American Countries, including Nicaragua. Pro Mujer Nicaragua was established in 1996 with resources from USAID. Pro Mujer focuses on working with female headed households, particularly in urban areas. It currently operates in Chinandega, Masaya, Managua and Leon. ProMujer also offers training in basic business skills, sexual and reproductive health education, and gender and self-esteem awareness. In 2005 Pro Mujer had a gross loan portfolio of USD 3 million, total assets of USD 4 million, and 17,000 active borrowers. Web-site: www.promujer.org. TRIVELLI