COFIDES will support the empresa de crédito alternativa to strengthen the financial inclusion of Peruvian micro and small enterprises
COFIDES will contribute with a technical assistance to the Triple Inclusive Finance (TIF) Program that reinforces a previous loan granted by FONPRODE and which has the financial support of LACIF.
Madrid, January 22, 2024. COFIDES and the Empresa de Crédito Alternativa – EC Alternativa (Alternative Credit Company) have signed an agreement for the development of a technical assistance project that will contribute to promoting financial inclusion in Peru to generate social, economic and environmental impact.
In the framework of the Triple Inclusive Finance (TIF) Program, the agreement foresees a project financed with a maximum amount of EUR 365,250. COFIDES will grant EC Alternativa resources from the TIF Program on a co-financing basis complementing the three million dollars loan previously granted to EC Alternativa by the Spanish Cooperation through FONPRODE to promote the financial inclusion of Peruvian micro and small businesses (MYPE).
This technical assistance project will contribute to the deepening of the financial services offered by EC Alternativa while strengthening the entity, with a view to a possible conversion to a financial entity with a deposit-taking license in the future, developing initiatives that will contribute to three aspects:
- Financial deepening: with activities such as the design and implementation of an internal framework for social and environmental aspects, the conception and implementation of a measurement system and the support in the development of additional application functionalities and a feasibility study to change the banking core.
- Green microfinance: through the design of a specific product (“Green Credit”) and its distribution strategy, and the evaluation of the risks and capabilities of EC Alternativa to offer financing to micro and small businesses in climate mitigation and adaptation activities and to identify challenges and opportunities in the face of climate change.
- Institutional strengthening: through the review of the credit methodology and process and the internal control system; the rationalization in the offer of credits of smaller amounts; the review of different human talent management policies and processes; training staff and measuring customer satisfaction.
Miguel Tiana, COFIDES general director, has highlighted the relevance of this type of projects, which contribute to strengthening the local productive fabric, in this case in Peru, but which are also being promoted in other areas of Latin America. “We are proud to implement initiatives like this, which focus on supporting local SMEs as a fundamental axis to enhance the economic, environmental and social development of the region.”
For Fernando Bautista, EC Alternativa general manager, “the Agreement between COFIDES and the Empresa de Crédito Alternativa constitutes an important milestone for the more than 67,000 rural clients in northeastern Peru, who will benefit through the loan and technical assistance from financial deepening, green finance and institutional strengthening. We will follow the triple impact route through banking at the base of the pyramid, social performance management and the implementation of green products that take care of the environment.”