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IDB Fund approves $840,000 to strengthen local credit union networks in Ecuador

The Inter-American Development Bank’s Multilateral Investment Fund (MIF) announced today the approval of a $840,000 grant to strengthen local credit union networks in Ecuador.

The objective of the program is to broaden and improve access to efficient, sustainable financial services for microenterprises and low-income populations in Ecuador’s rural areas and medium-sized cities.  This will be achieved by strengthening local networks in order to improve the quality of microfinance services offered by credit unions in those areas and cities.

“Microfinance institutions operating nationally have little or no presence outside provincial capitals, so microentrepreneurs and low-income people in rural areas depend mainly on credit unions to access financial services,” said Fermín Vivanco, project team leader.

In the past four years, credit unions in 10 provinces located in Ecuador’s mountain region have formed two regional microfinance networks, the Southern Council of Credit Unions (UCACSUR for its acronym in Spanish) and the Northern council of Credit Unions (UCACNOR in Spanish) in order to strengthen the member institutions and expand the financial services they offer.

However, the credit unions affiliated with these two local networks have limited access to training, technology and specialized technical assistance due to their distance from programs based in Quito and Guayaquil and to limited availability of resources. These credit unions provide services to about 250,000 people.

The MIF grant will help address these shortfalls by developing the technical capacity and sustainability of these two local networks, broadening and improving the quality of member credit union services and disseminating best practices for credit union networks.

The program will be executed by UCACSUR during a three-year period.

The Multilateral Investment Fund (MIF) is an autonomous fund, administered by the IDB, that provides grants, investments and loans to promote private sector growth, labor force training and small enterprise modernization in Latin America and the Caribbean.

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