Ecuador Microcredit Program

This current project is creating credit centers in poverty-stricken rural communities in the province of Esmeraldas, Ecuador. The level of poverty in the areas to be served is over 95 %. Over 50% of the people are living in extreme poverty, living on 50 cents or less per day.
The new credit centers are providing microcredit loans averaging around $250 to these very low income people to undertake their own small businesses. These are people who would not qualify for normal bank loans due to their low incomes. Funds invested in a Rotary microcredit program continue as a Revolving Loan fund to support the future needs of the participants and others in their community
Microcredit programs have been highly successful in developing countries throughout the world. Through this program following the Grameen Bank model, small loans are given to groups of low-income people to help them set up small businesses. Participants guarantee each other's loans; so the payback rate has been quite high. A previous project in the Esmeraldas region had a payback rate of 100%.
These small loans ($50 and up) are often used to buy sewing machines, hand tools and other equipment, or to set up a small shop to sell necessaries in their neighborhood. They are used to buy fishing boats, cloth or materials for handicrafts, animals to raise, or fruit and vegetables to sell in the marketplace. These small loans make the difference between despair and opportunity, between starvation and being able to feed their families.
This microcredit project is a joint project between Rotary clubs in District 5150 (Marin,San Francisco & San Mateo counties) and the Rotary Club of Quito Occidente (District 4400).
The Cooperating Partner, FUDECE, has offices in the areas to be served and has many years of experience in microcredit. In addition to credit, FUDECE also provides training programs for the participants. This will be our third Rotary project with FUDECE.
Poverty affects many people in Ecuador. This program will help the poor in the Esmeraldas Province, which is the poorest province in Ecuador. It will provide the participants a way to take care of their families, educate their children, and improve their lives and their living conditions.
The total funding for this project is $182,712 which is the largest Rotary global grant project so far in Ecuador. The Rotary Club of Mill Valley gave $21,000 in cash and matching money from the Rotary Foundation!
A Global Grant was approved for Guayaquil, Ecuador on April 6, 2015. This Global Grant is a joint project between Rotary Clubs in District 5150 (Marin, San Francisco, and San Mateo counties and the Rotary Club of La Puntilla, Ecuador. This is a $82,500 project. The Rotary Club of Mill Valley has donated $7,500. This project is different from our past microcredit projects where we assisted individuals to set up or expand their own small businesses. This will be an economic initiative to help poor people set up small manufacturing and craft organizations working together as groups. This approach has worked successfully in this region of Ecuador, and they would like to expand it with our support. Each group will be taught how to make a specific product in which their group is interested, including making shoes, sports clothes, bread, banana chips, and pastry. The groups will only receive loans after an extensive seven month training and business development program. Then they will receive business assistance, counseling, and monitoring after the loans are given.
The group loans could be for up to $2,500 per group, depending on the qualifications, needs, and business the group is conducting. Repayment will be 6 to 9 months, depending on the business and size of the loan. Hogar de Christo (the affiliated microfinance institution) believes the loan recipients will have a greater opportunity for increased income through these manufacturing businesses. It is an interesting and innovative approach.
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