CAF supported 729 entrepreneurs with loans managed through crowdfunding
Through an agreement signed with Kiva, 300 more than expected micro-loans were handled in four of CAF's shareholder countries, 93.83% of them to women. This operation constituted the first direct financing in a crowdfunding platform by a development bank in Latin America
In October 2014, CAF, Development Bank of Latin America, signed a technical cooperation agreement with Kiva, aimed at helping its crowdfunding platform with the objective of addressing the financing needs of Latin American micro-entrepreneurs.
Crowdfunding, also known as "mass financing", consists of gathering collective funds to finance initiatives promoted by people or institutions, usually involving the Internet. This modality has been channeled to finance movies, political campaigns,social work, and to grant loans, which is Kiva's specialization.
During the validity of the agreement, individuals interested in non-profit financing for small entrepreneurs in vulnerable socio-economic conditions may do so through Kiva's web page.
In the framework of the achieved agreement, CAF facilitated USD 90,000, aimed at duplicating the amount of the loans granted in four shareholder countries, to reach a total of USD 180,000.
Following are the most relevant results of the operation:
- Of the USD 90,000 disbursed, USD 89,774 were recovered, implying a rate of only 0.25 percent of unrecovered loans.
- The average loan was lower than anticipated (USD 247 versus USD 500), and 729 micro-entrepreneurs from four countries and nine micro-financial institutions were handled, 300 more than expected. These resources were aimed at 10 different economic sectors, with a larger concentration on food and commerce.
- With respect to gender, 93.83 percent of the loans were granted to women.
This operation showed that the micro-financial institutions that are part of the Kiva platform are capable of developing portfolios with an excellent credit quality, reaffirming once again that micro-entrepreneurs are good credit subjects.
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