Microfinance and Financial Inclusion in Nicaragua

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    07-Nov-2014

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  • 1. Microfinance and Financial Inclusion in Nicaragua
    Empowering female microentrepreneurs to create a budget and open a savings account
  • 2. Nicaragua
    Population: 5.9 million
    2nd least developed in Western Hemisphere
    GDP per capita: $3,000
    Development Issues
    Poverty
    Underemployment
    Child Labor
    Underdeveloped Infrastructure
  • 3. Sister Maura Clarke Center for Comprehensive Education and Empowerment
    Est. 1992
    Revolving Fund
    Est. 1996: 30 participants and U$ 20,000.00
    As of 2010: 595 participants and U$ 434,941.26
    78 % women
    2 % illiterate
    81 % urban
  • 4. Sustainable Development
  • 5. Reality Check
    Goal: Learn about the accounting and saving habits of 27 female microentrepreneurs
    Method: One-on-one interviews
  • 6. Reality Check
    Lessons Learned
    Most calculate earnings
    Few calculate expenses
    Very few make budgets
    Obstacles to saving
    Distrust of banks
    Uncertain of requirements
    Prefer to have money on hand
    Belief that any saving is currently impossible
  • 7. Capacitaciones (Empowerment)
    Goal 1 - Increase organization and prepare to make a budget by systematically calculating earnings and expenses
    Instructional material: Basic accounting spreadsheet
  • 8. Capacitaciones (Empowerment)
    Goal 2 - Increase capacity for long-term planning, establish priorities and begin to think about saving by creating a detailed budget
    Instructional material: Locally relevant budget template based on interviews
  • 9. Capacitaciones (Empowerment)
    Goal 3 - Increase financial security by opening and maintaining a savings account
    Instructional material: Step-by-step guide to saving including
    Opening an account
    Managing a debit card
    Avoiding fees and fines
  • 10. Capacitaciones (Empowerment)
    Goal 4: The participants continue to meet after an initial follow up meeting, forming a sustainable support network
  • 11. Capacitaciones (Empowerment)
    Results
    Most began systematically calculating their expenses
    Many planned to create a budget for the month of August
    Very few created a savings plan
    Almost no one opened a savings account
    The women decided not to continue meeting
  • 12. Capacitaciones (Empowerment)
    Conclusions
    Saving habits did not change due to
    Prioritization of growth over stability
    Belief that saving is impossible in economic tough times
  • 13. Future Vision
    Long term: End financial exclusion by ensuring that Central Americans currently living on less than $2 a day have access to microcredit and microsavings
    Summer 2012: Research or field work in the area of developmental economics

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