As a legacy of Crimson’s assistance on the USAID-funded Rural Competitiveness Activity (ARCo) project in Bolivia, Banco FIE has launched Purchase Order Finance on a commercial basis, making $22.5 million in new loans to over 6,700 rural farmers and farmers’ cooperatives during 2011. Banco FIE plans to increase its presence by expanding its rural branch network from five branches to 20 branches during 2012, to further roll out POF and other types of rural and agricultural lending products.
The ARCo project ran from 2005-2009 and was designed to strengthen the competitiveness of rural enterprises in the Chapare and Yungas regions of Bolivia, thus increasing sales, income and jobs in the licit economy. Crimson advisers oversaw the Financial Services Unit of ARCo, which worked to open channels of finance for small and medium sized enterprises. Through a competitive process, Crimson’s team selected FIE -- then a leading Bolivian microcredit institution -- to pilot new value chain finance products in the rural markets of Yungas and Chapare, including POF. With Crimson’s support, FIE opened five new lending branches in Yungas and Chapare, which now provide full banking services to communities. In just over two years, this innovative program issued over $18.5 million in loans to more than 4,000 clients and created an estimated 3,500-plus job equivalents. In addition, rural clients opened more than 9,000 savings accounts with deposits totaling over US $4.5 million. The program also assisted FIE upscale and successfully transition to a licensed bank.
With the successful launch of POF on a commercial basis, Banco FIE has now made over $42.5 million in loans to over 10,200 rural clients. This represents leveraged, private-sector resources to USAID resources ratio of over 55:1.