BBVA Microfinance Foundation

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As part of its pledge to financial inclusion, in 2007 BBVA set up the BBVA Microfinance Foundation whose aim is to use microfinance to promote the self-sustainable economic and social development of those at greatest disadvantage.

The Foundation, whose work is targeted at Latin America, has two lines of action, the setting up of a Microfinance Institution Network in the region (the main line of action), and the development of initiatives that help to transform the microfinance sector, particularly in the area of improving good corporate governance and human capital.

The BBVA Microfinance Foundation currently has around 1 million customers in Latin America, with a social impact of close to 3.7 million people. The Foundation has 4,963 employees and a network of 359 branches, and has granted loans amounting to an accumulated total of €2,500 million since it was set up, with an average value of €1,052 and an average default rate of 3.1.

The Foundation is committed to and works toward success for its customers: entrepreneurs at the base of the pyramid. Almost 60% of the Foundation’s customers are female.

In 2011, the Foundation made progress with the consolidation and expansion of its Microfinance Network in Latin America through the takeover of two new institutions: Fondo Esperanza en Chile, y Financiera Confianza in Peru. These institutions joined the following: Banco de las Microfinanzas-Bancamía in Columbia, Caja Nuestra Gente in Peru, Corporación para las Microfinanzas in Puerto Rico, Emprende Microfinanzas en Chile, Servicios Microfinancieros in Argentina, and Microserfin in Panama.

MF BBVA basic global data

2011 2010
No. of customers 948,508 620,584
Social impact (Million people) 3.7 3
No. of employees 4,963 3,350
No. of branches 359 275
Total microcredit volume (Million euros) 737.3 432
Average loan amount (euros) 1,052 696
No. of countries where BBVA operates 6 6
Scope: BBVA Group

In 2011 Caja Nuestra Gente was named the Best Microfinance Institution in Latin America and the Caribbean as a result of its positive impact in the most marginalized groups, according to the ranking compiled by Mix Market, the Inter-American Development Bank (IDB) and the Multilateral Investment Fund (FOMIN).

As part of its strategic agreements, the Foundation signed a public-private partnership with Autoridad de la Micro, Pequeña y Mediana Empresa de Panamá (AMPYME) to manage microfinance institutions in the country. The partnership includes joint action to create financial products and services, as well as training, skills extension and financial literacy programs and projects.

The International Finance Corporation (IFC) a member of the World Bank Group, reasserted its strategic partnership with the Foundation to develop microfinance institutions, making a new investment of S$ 4.6 million in Caja Nuestra Gente (in which it invested $7.4 million in 2009) to boost its growth and community-based rural focus in Peru. IFC also bought $10 million of Banco de las Microfinanzas Bancamía preference shares to boost its growth and extend access to productive microfinance for underprivileged people in Colombian society.

Loan Portfolio

  2011 2010
Average Loan Amount (euros) NPA ratio (%) Loan Portfolio Volume (Thousand euros) Average Loan Amount (euros) NPA ratio (%) Loan Portfolio Volume (Thousand euros)
Bancamía (Colombia) 891 2.8 347,615 699 2.9 240,062
Caja Nuestra Gente (Peru) 1,465 2.8 217,096 1,494 3.5 177,463
Financiera Confianza (Peru) 1,637 4.0 135,430 n/a n/a n/a
Emprende Microfinanzas (Chile) (1) 855 7.5 8,842 1,192 6.7 7,304
Fondo Esperanza (Chile) 302 0.5 15,584 n/a n/a n/a
Corporación para las Microfinanzas (Puerto Rico) 1,724 17.4 1,240 1,176 n.a 18
Contigo Microfinanzas (Argentina) (2) 741 7.3 870 641 7 575
Microserfín (Panama) 1,077 3.86 10,584 n.a n.a 6,559
Note: n/a = not applicable. The microfinance institution was not part of the Foundation. Note: n.a. = not available. (1) This institution changed name in 2011, formerly known as Servicios Microfinancieros (Chile). (2) This institution changed name in 2011, formerly known as Servicios Microfinancieros S.A. (Argentina). Scope: BBVA Group

To supplement its main activity, the Foundation also undertook initiatives to promote and transform the development of the microfinance sector. Along these lines, it continued to implement its Microfinance Specialist Training Program in partnership with the National Distance Learning University (UNED), local universities such as Universidad del Pacífico (Peru), Universidad Javeriana (Colombia), Universidad de Congreso (Argentina), Instituto de Estudios Bancarios (Chile), and supported by the Inter-American Development Bank (IDB) and FOMIN. This program has trained more than 1,250 people since it was set up in 2009.

The BBVA Microfinance Foundation also wrote a Universal Corporate Governance Code for Microfinance Entities for the sector. This reference document establishes the principles and standards that all good governance codes for an institution should contain, in accordance with internationally accepted standards and best practices.

As a supplement to the Code, the Foundation also wrote a “Guide to adopting good corporate governance principles in microfinance institutions”, in conjunction with the IDB.

To adopt and apply this, the Foundation is also running good governance Training Workshops for board of directors members at microfinance institutions. In 2011 workshops were run in Colombia and Costa Rica, training 139 professionals in this subject area.

As part of the Foundation’s institutional activity, it participated in the First Plenary Session that opened the International Microcredit Summit held in November in Valladolid (Spain). This session analyzed the role of ethics in microfinance institutions. The Foundation proposed the need for institutions, companies and people working at the bottom of the pyramid to strengthen their commitment to ethics. Apart from the Foundation Chairman’s contribution to the session, two of the Foundation’s microfinance institutions, Banco de las Microfinanzas Bancamía,Colombia, and Caja de Ahorro y Crédito Caja Nuestra Gente, Peru, explained their experiences at a Session which the Foundation organized at the Summit.