Strengthening partner performance in Bolivia
Fondo de la Comunidad (FONCOM) is an Oikocredit partner and microfinance institution (MFI) in Bolivia which mainly serves low-income earners in the urban and semi-urban areas of Cochabamba. The majority of FONCOM’s clients have set up micro, small or medium enterprises with few resources. In addition to providing loans, FONCOM offers its clients other financial services including savings products, utility bill payments and money transfers. FONCOM also provides employment to over 160 people through its seven branches across Bolivia.
In 2011, FONCOM realized that it needed to strengthen its social performance management (SPM) as well as risk management in order to accomplish its planned expansion. In addition, Bolivia's banking, finance and securities regulator, Autoridad de Supervisión del Sistema Financiero (ASFI), required financial entities to increase loan portfolios in productive activities, with a special focus on the agricultural sector. This meant that FONCOM needed support, and in early 2012, it approached Oikocredit for support in four key areas.
These initiatives included a programme (in association with a non-profit foundation) to help 200 new young entrepreneurs with training, business planning and access to financial services, which are quite limited for this particular market. The second was for FONCOM staff focused on risk management, with the third a pilot project to develop an agricultural credit product. This product was developed to support farming activities currently financially under-served. Lastly, the fourth area Oikocredit supported was the computerization of FONCOM’s management information systems (MIS).
These areas of support have assisted FONCOM in reaching more clients, in particular agriculture clients, as well as providing better access to finance for entrepreneurs. This is the case for micro-borrower and entrepreneur Felix Yucra Cárdenas, who has built a small business building football tables. Felix, who discovered his passion for making football tables when learning the trade from a friend, was initially turned down by the banks when attempting to obtain start-up capital to build his business. That was, until Felix approached FONCOM, which listened to his business plan and helped him grow his studio. Today Felix makes around 24 tables a month, employing several people in his studio, including his wife who lends a helping hand.
Felix is just one example of how FONCOM empowers entrepreneurs through access to start-up and working capital. In partnership with Oikocredit, FONCOM has significantly enhanced the capacity and experience of its risk management and SPM management teams, which will help the MFI implement its business plan. Oikocredit’s support will also assist the organization in enlarging its agricultural portfolio in compliance with regulatory requirements.