Increasing Access to Financing for Small Businesses in the Peruvian Amazonia
EDPYME Alternativa S.A. is a microfinance institution (MFI) in Peru with 20 years of experience in the market. The MFI was one of the first financial institutions in the country to partner with USAID CATALYZE Peru through its financial incentive program. Edpyme Alternativa, which committed to mobilize USD 500,000 in a year in the San Martín and Amazonia regions, reported that they mobilized 109% of their original commitment.
“CATALYZE Peru’s incentive program gave us an opportunity to increase our market. We are committed to achieving better results, not only for the financial institution, but especially for our clients,” says Fernando Tuanama, Manager of EDPYME Alternativa’s agency in the Moyobamba Province of San Martín.
“As the local financial institution, we do a lot of work visiting our clients in their own businesses or on their farms as a large number of our clients are agricultural producers. It is difficult — the distances, the access, the rains — but we are always looking for new clients,” said Tuanama.
The loan portfolio in the Amazon accounts for only 3.7% of the total loans of Peru’s national financial system due to geographical distances, lack of data and credit history, and other factors.
“We are committed because we are aware that financial support is needed for the economic recovery of the region,” Tuanama said. “For example, farmers are currently facing a very complex situation because of the heavy rains and the increase in the price of fertilizers. The price of a bag of fertilizer used to be around USD 20.00. It now costs USD 57.00, and it must be purchased and applied. It gives us great satisfaction to know that, by granting credits, we are supporting the development of crops.”
Since September 2022, the financial institutions that focus on micro-, small-, and medium-sized enterprises (MSMEs) have increased their activities and mobilization of capital in the Peruvian Amazon. EDPYME Alternativa’s Amazonia portfolio rose to 26% compared to the previous 12 months. This growth demonstrates the power of CATALYZE Peru’s blended finance archetypes and models in increasing MSMEs and producers’ access to financing, and in turn, helping to create jobs, increase incomes, and boost food production.
About CATALYZE
USAID CATALYZE, implemented by Palladium, is an 8-year program designed to mobilize $2 billion in private capital for development impact, especially in underserved social sectors and frontier markets across the globe. CATALYZE supports blended finance solutions working with local and international businesses and investors to explore and find commercially-viable opportunities and approaches to creating jobs, developing sustainable social services, tightening and rationalizing supply chains, and advancing growth. We work across 28 countries in Asia, Africa, Europe, Latin America, and the Caribbean, with 190 partners, including financial institutions, business advisory service providers, anchor firms, and job trainers.
