Private Enterprise and Financial Markets > Micro, Small and Medium Enterprise
II FORO: Awards for MIC Development-WINNERS
Highlights of this year's forum included the first annual Inter-American Awards for Microenterprise Development. By promoting organizations with creative and potentially replicable programs, the IDB hopes to stimulate further progress in microenterprise development, as well as recognize the breadth and scope of the actors in this field. The IDB's President, Mr. Enrique Iglesias, honored the forum with his participation, delivering awards for excellence in each of the following categories: Microfinance, Business Development Services and Social Entrepreneurship.
Selecting the Winners
The selection process proved extremely competitive. The Microenterprise Unit received approximately 100 nominations for the awards, from which 50 organizations and individuals submitted formal applications for consideration. Judges consisted of Members of the Board of Directors, Management and Staff of the IDB, incorporating a diverse cross-section of national representation and experience in the field. Winners were guests of the IDB at the forum, where the microenterprise community could publicly recognize their success.
This award recognizes financial intermediaries that have achieved success in broadening the availability of financial services to microentrepreneurs. Outstanding organizations demonstrate the ability to expand access to capital for the working poor and long-term institutional sustainability. This year the jury decided that the award should be shared between two very different microfinance institutions (MFIs) notable for their excellence in the field. From a wide variety of institutions that offer credit services, including banks, credit unions, finance companies and NGOs, the winners represent the diversity of approaches to microenterprise development. Financiera Calpiá, a regulated financial intermediary that captures savings, and Fundación WWB Colombia, a non-governmental organization, each received the Award for Microfinance.
Financiera Calpiá
Since 1995 when it became a regulated financial institution, Financiera Calpiá has disbursed over 175,000 credits in El Salvador. The five factors the institution points to in its success include a solid capital structure, a conservative and transparent financial policy, modern credit technology exclusively geared towards micro and small-businesses, a flexible and efficient operating structure and, above all, the positive way that clients identify with the institution.
For Pedro Dalmau y Gorrita, Calpiá's President, the institution has not only succeeded in replacing usurious credit markets, but has also introduced a new economic paradigm in the country: microentrepreneurs receiving access to appropriate credit terms from profitable and sustainable microfinance institutions. Financiera Calpiá deserves recognition for its impressive outreach, with over 29,000 active loans and a portfolio of over US$22 million. With an average loan size of US$758, the institution has been profitable for the past three years, and has been able to reach both urban and rural areas through its twelve branches. Despite the fact that Calpiá has only accepted deposits in all its branches since 1997, it already has almost 19,000 savings accounts and other term deposits for a total of US$2.8 million.
Financiera Calpiá sees its future challenge as making the transformation into a formal bank. In this way Calpiá will comply with new national banking legislation and ensure its continued role in the formal financial system, serving microentrepreneurs as a financial intermediary that offers both credit and savings services.
Fundación WWB Colombia de Cali
Founded in 1982 by a group of professional and businesswomen, WWB Colombia has demonstrated excellence in Microfinance throughout its 17 years of operation. The NGO accomplishes its mission through loan products customized to the needs of its microentrepreneurs, which allow it to maintain the delicate balance between achieving social objectives while generating necessary profitability.
By offering a minimum loan size of US$64, terms ranging from one day to 48 months and a variety of credit products, it meets the specific needs of microentrepreneurs working in Cali and neighboring cities. WWB Colombia's clients have indicated the appropriateness of these flexible credit terms through their high proportion of loan renewals, consisting of 80% of the institution's portfolio. Other institutional strengths include delinquency management, market penetration, staff productivity and profitability. Fundación WWB Colombia's innovative approach is evidenced through additional programs such as Servimicros. This pilot program strengthens the competitiveness of microenterprises engaged in the apparel industry through access to discounts on inputs and technical courses.
In 1999 WWB Colombia plans to open two new agencies, expanding its outreach from seven agencies which currently serve 16, 957 clients. However, the organization realizes that NGOs face limitations in their ability to mobilize financial resources. Consequently, WWB Colombia is seeking the development of a new regulatory structure for microfinance institutions in Colombia, one that will take into account the high costs of providing microcredit, while permitting sustainable development in a competitive market.
This award recognizes organizations that have demonstrated effectiveness in providing non-financial services to microentrepreneurs. These services may include training, technology transfer, marketing assistance, and business consultation, all of which help microentrepreneurs improve business performance.
The winner of this award was the Institute for Socioeconomic and Technological Research (INSOTEC) based in Quito, Ecuador. INSOTEC is a private, nonprofit organization, created in 1980 by a group of researchers and businesspeople to contribute to the economic, social and technological development of micro, small and medium-sized businesses in the country. INSOTEC assists entrepreneurs seeking business growth, market opportunities and access to new technologies. Business Service Centers in five cities attend 2,500 entrepreneurs annually by offering them training, technical assistance and business partnerships, as well as access to information, specialized machinery and commercial contacts. In order to provide these services, INSOTEC uses its own specialized personnel and leverages an extensive external network, attending to the diversity of client needs without increasing fixed costs.
INSOTEC's high level of profitability and strong internal management systems are particularly impressive. Through income received in exchange for technology services, consulting fees, financial services and fabric sales, the institution was profitable in both 1997 and 1998. Innovation that met competitive market demands helped INSOTEC realize US$80,000 in pre-donation profit last year, despite an unstable macroeconomic environment with 45% inflation. The institution's clear focus, reinforced by processes such as strategic planning for each of its lines of business, further contributes to a sustainable impact in the microenterprise sector. In the future INSOTEC plans to extend its offices in northern Ecuador, and later in southern Colombia, expanding product sales and encouraging commercial exchange for microenterprises.
This award recognizes innovative individual leaders working through either commercial or non-profit private sector institutions that combine social commitment and sound business practices to promote microenterprise and community development. These social entrepreneurs engage in creative problem solving by blending private sector methodologies with social objectives.
Social entrepreneurship involves the development of innovative programs to help individuals improve their livelihoods, particularly when the lack of financial, business, community, or social services limits their opportunities. By fostering growth in all productive sectors, as well as supporting development initiatives, these private ventures have a lasting impact. Participants in this award category go beyond the traditional scope of for-profit businesses or microenterprise development, creating lasting sources of support for the economic activities of the working poor.
We are pleased to announce that Beverly Beckles, of the National Centre for Persons with Disabilities (NCPD) in Trinidad, is the winner of this award. Beverly Beckles has served as the CEO for the Centre for sixteen years, and has worked in the NGO sector, developing economic, educational, and social projects for twenty-seven years. Ms. Beckles has played a key role managing organizational and program development for the disabled community, working with national and regional governments, as well as international organizations, to build the NCPD's reputation throughout the English speaking Caribbean. Winning the Inter-American Award for Social Entrepreneurship should serve to promote the Centre's activities, as well as focus the attention of the international development community on its innovative and potentially replicable program.
The Centre advances the socio-economic status of the disabled, promoting their acceptance by employers and society at large, while successfully competing in the marketplace through the provision of high quality goods and services. NCPD serves individuals with physical, developmental and learning disabilities, and with hearing and speech impairments, by providing them with employment and life skills. After performing a series of assessment tests, individuals receive training that includes printing, bookbinding, garment construction, upholstery, food preparation, wheelchair manufacturing and repair, woodwork and horticulture. With graduates recognized by the National Training Board of Trinidad and Tobago, the Centre's product outputs are market competitive. Complementary services range from motivational counseling to job placement and independent living skills.
In the future, the NCPD seeks to encourage partnerships with other social organizations, extending outreach through external program replication rather than internal expansion. Ms. Beckles and the National Centre for Persons with Disabilities successfully provide the disabled community with access to private sector skills and market opportunities, in a true example of social entrepreneurship.
Last updated: 06/13/07
