The Agri-Business Capital Fund this week announced an investment of €1.1 million in MiCreditoYa Microfinanciera SAS, a microfinance institution operating in the Nariño department in the southwest of Colombia.
Access to finance remains a significant challenge in many parts of the world, particularly in rural areas where traditional banking services are often scarce. In Colombia, this issue is pronounced in the agricultural sectors of rural regions, where smallholder farmers and rural entrepreneurs struggle to secure the necessary funds to grow their businesses and improve their livelihoods.
Financial inclusion is crucial in these areas as it empowers individuals and communities by providing them with the tools and resources to participate in the economy, build resilience, and enhance their quality of life. Microfinance institutions play a pivotal role in this landscape, offering tailored financial services that cater to the unique needs of underserved populations. By investing in a microfinance institution in Colombia, Agri-Business Capital Fund said its aim is to bridge the financial gap, support sustainable agricultural practices, and drive economic growth in rural communities, ultimately fostering a more inclusive and prosperous society.
Established in 2017, MiCreditoYa is a credit-only microfinance institution operating in Pasto, Ipiales and Guachucal in the Nariño department of Colombia. It has been at the forefront of bridging the financing gap for micro-entrepreneurs and small-scale farmers by offering financially responsible alternatives designed to match clients’ cash flow cycles. With a current loan portfolio of €5.5m, MiCreditoYa has made substantial strides in strengthening microbusinesses and rural agricultural initiatives. As of December 2023, the institution served 7,331 clients, 72% of whom are in rural areas, with a notable focus on low-income populations, female farmers (55% of clients), and young people below 28 years old (13% of clients).
The agribusiness activities MiCreditoYa funds include a diverse range of crop and livestock farming. Specifically, loans are provided for vegetables (including onions and potatoes) and fruit farming, cereal production, and coffee cultivation. On livestock farming, the MiCreditoYa funding is directed towards dairy farming, cattle breeding and guinea pig farming.
Additionally, a smaller portion of the funding supports aquaculture. These loans are tailored to meet the seasonal and cyclical needs of these activities with an average tenure standing at 17 months, ensuring that small-scale farmers have access to the necessary capital to sustain and grow their operations throughout the agricultural cycle.
The €1.1m investment in MiCreditoYa from the ABC Fund will enable MiCreditoYa to expand its loan portfolio, potentially adding 2,500 loans to farmers in Nariño onto its loan book over the next two years. The ABC Fund’s support will also help MiCreditoYa maintain the resilience of this loan book despite challenging market conditions, positioning MiCreditoYa as a leading entity in rural lending in Colombia.
“This €1.1m investment by the ABC Fund will significantly bolster MiCreditoYa’s ability to lend to micro-entrepreneurs and small-scale farmers,” Bamboo Capital Partners CEO David Grimaud said. “Through this investment, the Fund aims to drive financial inclusion and support sustainable economic growth in rural South West Colombia.”