Posted by: Caterina Meloni, Technical Team Lead, Gender Finance
In Nicaragua, the Argidius Foundation engaged Enclude to increase access to finance for Small Growing Businesses (SGBs) by working with local financial institutions to provide long-term project finance to SGBs.
To start, Enclude sent a team of SGB and female economy experts to spend two weeks in Managua where they gained a better understanding of women’s experiences when seeking financing for their businesses. The team surveyed female entrepreneurs in a number of different industries and found that fixed assets and guarantor signatures posed the greatest barriers to acquiring a loan.
To achieve significant scale with the project, Enclude partnered with BAC Nicaragua, a subsidiary of BAC Group owned by Colombia’s Grupo Aval, to expand their lending to high-growth SGBs. Targeting this rapidly expanding market segment provides BAC with an attractive opportunity to diversify its portfolio, explore un(der)served markets and enhance its brand image and recognition, all of which supports BAC’s longer-term strategy to become the leading lender to small and medium-sized enterprises in Nicaragua.
One of the women interviewed, Ana Alexandra—the owner, manager, and lead designer of KUERO, a boutique leather goods retailer—had these very problems. Alexandra wants to export her products, which requires a loan to hire new staff, conduct training, and increase production. But banks will not lend to her without a title to property valued above USD 20,000. Finding a guarantor can be very difficult, as even close family members can be reluctant to put their resources at risk for a small business run by someone else, however close or trusted.
To better serve clients like Mrs. Alexandra, Enclude is working with BAC to develop a strategy aimed at supporting women-led SGBs and meeting their financing needs more easily. Watch Enclude’s blog for updates as the programme develops.