Developing green credits for vulnerable populations in Central America

ADA and REDCAMIF ran a joint programme from 2018 to 2021 aimed at improving the quality of life for low-income populations in Central America and the Dominican Republic by giving them access to green loans with a strong social dimension. The purpose of these loans is to finance environmentally friendly activities, either by improving housing conditions or by making farms more profitable by adopting more responsible practices.
ADA and REDCAMIF supported 18 MFIs in Guatemala, El Salvador, Honduras, Nicaragua, Panama, Costa Rica and the Dominican Republic in developing green loans. Six of them also received funding from the Luxembourgish Ministry of Environment, Climate and Sustainable Development (MECDD).

Six types of green loans were developed by these 18 MFIs:

• loan for access to solar energy, which finances the installation of solar panels to produce electricity and hot water
• loan for access to water and sanitation, which is used to finance the connection of habitations to the city’s drinking water network, to build sanitation facilities, or to install rainwater collection or organic waste treatment systems
• green housing loan, which is used for energy-saving home refurbishments
• agriculture and livestock loan, which allows farmers to finance climate change adaptation and mitigation practices, such as the improved management of water and excrements or new breeding methods
• sustainable family farming loan, which is used to finance livestock inputs and to teach families sylvopastoral techniques (which encourage grass growth) for use in their livestock farming
• ecotourism loan, which finances the construction of ecolodges, hotel rooms or restaurants in potential tourist areas, as well as tourist facilities (hiking trails, signage, transport).

In late 2021, more than 2,400 customers had taken out a green loan with the 18 MFIs supported by ADA and REDCAMIF.

Eliseo Carrillo Perez, beneficiary of a green energy loan from the Guatemalan MFI “Fundación Fondo de Desarrollo Local” 
“I took out a 10-month loan of USD 610 in March 2021 to buy a solar-powered water heater. I now have enough hot water to take 5 showers a day and my electricity bills fell by 50%.” 

Des crédits développés selon une méthodologie centrée sur le client
La conception de ces crédits verts à forte valeur ajoutée sociale s’est faite selon les principes du « Customer Centricity », une méthodologie qui place le client au cœur des orientations stratégiques en intégrant toutes les parties prenantes de l’organisation (clients, employés, fournisseurs, partenaires, actionnaires et collectivités). Cette méthodologie est au cœur de l’accompagnement fourni par ADA et REDCAMIF aux IMF qui développent de nouveaux produits.