$7 million investment to increase micro financing to rural and agribusiness sectors in Nicaragua

In Nicaragua, where 70% of the population lives in rural areas, agriculture is the largest source of employment and accounts for 17% of the country’s GDP. Despite this, most bank lending is concentrated in the commercial sector, with very limited inroads into rural areas and among small and medium agricultural enterprises. Microfinance is therefore one of the few sources of funding available to agricultural SMEs, and plays a crucial role in the development of Nicaragua’s rural economies.

 

An investment of $7 million in Fondo de Desarrollo Local (FDL) will support FDL’s expansion of its lending in the rural agribusiness sector and to micro-entrepreneurs in Nicaragua through its network of rural branches. FDL is the largest microfinance institution in Nicaragua, with approximately 31% of its portfolio concentrated in extreme and high poverty regions. With IFC investment, FDL will continue to play a key role in reaching small and medium producers, and offering support to the most vulnerable regions of Nicaragua.

 

 

The GAFSP Public Sector Window is also funding the Caribbean Coast Food Security Project in Nicaragua.

 

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