Financiera Confianza: Inclusion and fight against poverty
With the aim of reinforcing financial inclusion and the fight against poverty, Financiera Confianza – an entity of BBVA Microfinance Foundation – was formed in Peru. The results so far are very significant and most of its success derives from its clear mission: to promote the sustainable development of the most disadvantaged groups through responsible and productive finance. In other words, in keeping with BBVA's purpose, Confianza seeks to place the opportunities of this new era within reach of everyone.
Financiera Confianza currently has a portfolio of about 500,000 credit and savings customers. They are Peruvian citizens of very few means and many of them live in the most remote rural areas of the country. Confianza is present in all 25 regions of Peru and has the second highest number of microfinance agencies in the country.
Martín Naranjo Landerer, General Manager of Financiera Confianza, has stated on several occasions that poverty in Peru is rural and has the face of a woman. More than half of the new customers registered in 2015 were women (52%), 40% were young people under 30 years old and 23% lived in rural areas.
When compared with the rest of its sector, Financiera Confianza is the seventh microfinance firm in terms of the overall number of credit investment but takes third place as regards credit to small and micro enterprises and tops the ranking of rural credit.
The efforts made by the entity over the last few years have meant that 41% of customers who were poor at the start of their relationship with the firm were able to leave that situation behind in the second year of their link with Confianza. As a result, 42% of the 93,500 new customers in 2015 were included in the financial system for the first time.
Lessons to change your future
Since 2014 Financiera Confianza has led the first private initiative targeted at bringing financial education to and promoting formal savings habits in Peru's rural areas. Through the program "Ahorro para todos", financial education has reached about 12,000 people in 80 rural communities of Apurímac and Cusco in the Peruvian Andes. More than 2,400 of these people decided to open a savings account with Confianza by April 2016. Also, it should be noted that 81% of these new formal savers are women.
This initiative earned Confianza the 2015 Citi Award for the Most Innovative Financial Entity in Peru. "Ahorro para todos" was selected on the basis of its methodology which stems from its customers' previous knowledge: their experiences, customs, and language, etc. Also, the workshops are in quechua.
The program's impact on these communities helps improve family economy through secure savings and better expense planning; reenergizes the role of women within their families; generates a chain of financial education that is transmitted to the children; and helps decrease distrust in the financial system.
Financiera Confianza has developed another product which is designed for women, the group credit "Palabra de Mujer." In 2015, it helped 50,000 women from vulnerable sectors in several regions across the country. Over 83,000 women entrepreneurs benefited from this program over the last few years.
Primarily targeted at vulnerable or disadvantaged women and including an element of financial education, this group credit has evident social effects: 49.3% of customers who stay with Confianza for at least two years stop being poor
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Promoting female financial inclusion, this product grants formal credit to groups of eight women on average and helps them draw up a business plan based on their revenue.
In short, Financiera Confianza brings credit to entrepreneurs who are not able to access the conventional financial system. It then goes on their journey with them whilst always implementing responsible credit assessment which ensures that their businesses generate surplus. The aim is to help the most disadvantaged people in Peru to progress and develop. As a consequence, Financiera Confianza has the highest quality portfolio in Peru's microfinance system.