FinDev Canada granted a loan of USD 7.5 million to Alianza del Valle, a leading financial cooperative providing services to micro-enterprises and individuals in Quito, the capital city of Ecuador. The operation will benefit an important group of women entrepreneurs and micro-entrepreneurs by giving them access to productive credits.
Financing is a driving factor for economic and social development in Ecuador as it increases the number of micro-credits, thus generating new sustained employment opportunities and income improvements for thousands of low-income households, which implies an improvement in the quality of life of the population.
Founded in 1970, Alianza del Valle has a solid history in the provision of savings and loan services to its proprietary members, which today amount to over 139,000 partners in Quito and its surroundings. Alianza del Valle is the sixth major financial cooperative in Ecuador, with 12 branches in the city of Quito, as well as innovating online services that respond to the needs of its rural clients. Its loan portfolio has grown to an annual average of 30% since 2016, with 65% of all loans destined to micro-entrepreneurs and 35% granted to members of the cooperative as personal loans.
Alianza del Valle also stands out for providing an important space for women’s empowerment where: 60% of the Board of Directors of the cooperative, including its president, 62% of its employees, and 45% of its members are women.
“This loan is perfectly in line with our strategic objectives”, said Paulo Martelli, Chief Investment Officer of FinDev Canada. “We are supporting the microfinance sector in Ecuador, as it is facing access barriers to financing that are exacerbated by the COVID-19 pandemic. We see Alianza del Valle as a well-managed financial intermediary that will use this financing to help hundreds of micro-entrepreneurs stimulate local markets, create income opportunities, and improve the quality of life of the population”.
We look forward to fully meeting the needs of our microcredit clients as a result of this financing”, said Engineer Rolando Cadena, General Manager of Alianza del Valle. “In particular, we will be able to increase our support to micro-entrepreneurs often facing obstacles to obtain financing for their employment projects. We are excited to be able to help them start or broaden their business activities and multiply the economic and social benefits”.
Local Economic Development
All FinDev Canada’s financing is used to grant loans to micro-enterprises in Ecuador, which constitute 90% of all companies in the country. It is estimated that there is a financing gap of USD 2.2 million as these companies seek credit to maintain or broaden services to low-income clients, especially with the market turmoil caused by the pandemic and its related business closures. This new financing will help Alianza del Valle provide services to micro-enterprises through its presence in Quito, while creating financial inclusion opportunities through digital channels for its partners and clients in the rural areas of Ecuador, where 36% of the country’s population lives.
With at least half of the financing destined to promote women-owned companies, the loan granted to Alianza del Valle will help increase access to financing for women entrepreneurs in Ecuador. This commitment makes the transaction eligible for the 2X Challenge, an international commitment to raise capital in order to increase women’s economic participation.
Additionally, Alianza del Valle is an important example regarding equal opportunities in its own operations, with a high women’s representation at all levels of the organization and plans to develop a Gender Action Strategy.
Development Finance Institutions and COVID-19
FinDev Canada has a mandate to support companies that have a presence in the areas most affected by the COVID-19 pandemic. Investments will help guarantee that developing markets continue to have liquidity, providing important support for the recovery of the economic and social consequences of this crisis.
About FinDev Canada:
The Development Finance Institute Canada (DFIC) Inc., operating under the FinDev Canada brand, is a Canadian institution dedicated to providing financial services to the private sector in developing countries with the aim of combating poverty through economic growth by focusing on three main topics: economic development through job creation, women’s economic empowerment, and climate change mitigation. The Development Finance Institute Canada Inc. is a wholly owned subsidiary of Export Development Canada (EDC).
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