New Member Spotlight: CONAFIPS

Thursday 26th January 2023

CONAFIPS is an apex institution supporting retail financial services providers in Ecuador with a comprehensive set of products that enable them to serve the unbanked and underbanked. We interviewed CEO Roberto Romero, who shares the institution’s approach to supporting the female economy.

Alliance: For the benefit of our global readership, can you share the mission and operating model of The National Corporation of Popular and Solidarity Finance (CONAFIPS)?

Romero: CONAFIPS is a second-tier public bank whose objective is to strengthen the low-income population mainly working in the informal sector through the provision of finance to savings and credit cooperatives who in turn provide microfinance to thousands of Ecuadorian families.

Alliance: As a second-tier financial services provider, what types of financial sector institutions do you work with, and what impact are you looking for?

Romero: We currently work with 350 savings and credit cooperatives in Ecuador that represent 77 percent of the market share of the Popular and Solidarity Financial System Organizations (OSFPS).

These organizations in turn support thousands of micro, small and medium entrepreneurs who currently generate 80 percent of the employment in Ecuador.

Alliance: What impact does CONAFIPS have on the end user of savings and credit cooperatives (low-income families and microenterprises)?

Romero: Ecuadorian President Guillermo Lasso’s strategy is to generate economic opportunities for the development of all the citizens of Ecuador. The microfinance we support is for productive use in the production, trade, and service sectors.

Currently 50 percent of loan recipients supported with our funding are female entrepreneurs, nearly 40 percent are in the rural sector, 27 percent are in businesses developed by young entrepreneurs between 18 and 29 years of age, and 4 percent are in the hands of senior citizens.

Alliance: CONAFIPS also supports financial institution clients. What are some examples of the ways you support gender-focused institutions?

Romero: We provide our financial institutions with technical assistance, training and support to build their capacity to take on more resources from the Corporation. We also provide training of trainers on financial education, so that they can train their customers, thus contributing to improving the quality of life of women and their families.

To incent more women being reached, financial organizations that provide 60% or more of CONAFIPS loans to female entrepreneurs receive a 0.5% discount on the interest on the loan. This benefit is for loans to end-users of up to US$10,000.

Alliance: CONAFIPS has just launched a new Environmental and Social Risk Analysis System and a green product. What does this new initiative consist of, and how has it been received?

Romero: It is with great pride that I can share we have been recognized internationally as one of the most important institutions in Latin America in the implementation and granting of green and sustainable loans.

In terms of measurement in 2022, CONAFIPS implemented the Environmental and Social Risk Management System (SARAS), a tool to identify, evaluate, categorize and monitor the level of social and environmental risk that a small business activity may have. This was done with the support of the United Nations Development Program (UNDP), the Development Bank of Latin America (CAF) and the Inter-American Development Bank (IDB), who provided funds and training in SARAS.

Of the total amount placed in micro and small business loans and credit guarantees between 2021 and 2022, the SARAS system has evaluated more than $383 million.

Our green credit line, an instrument that finances activities that contribute to the fight against climate change is supported by CAF; and allows provides for loans up to $180,000, with a term of 84 months and preferential interest rates for green business activities.

Alliance: CONAFIPS has worked extensively on collecting sex-disaggregated client data from its financial service providers. Why was it important to do so?

Romero: Collecting client data disaggregated by multiple variables, including gender, is of great importance in making decisions related to financial inclusion. This information has enabled us to tailor credit solutions to support specific customer segments.

It has also been fundamental to know and analyze the percentage of women being reached, as well as the opportunities and needs that arise around their accessing credit.

Alliance: What does the data show about women’s access and usage patterns compared to men’s, either as business owners or individual savers/debtors?

Romero: The breakdown shows that we are reaching 50% women through our retail financial services providers. We work with a range of stakeholders to ensure that this is achieved.

Alliance: What will your future gender strategy focus on, and what initiatives are you working on?

Romero: Our challenge is to strengthen the female or violet economy as we call it, and also to ensure equal opportunities for all, regardless of their gender.

Between 2021 and 2022, the national government, channeled $755 million in productive credit lines through CONAFIPS, and 50 percent went to women surpassing our target of 42%.
In 2023, we will continue this effort by offering preferential rates and earmarking funds for loans to women.

Alliance: Why did you decide to join the Alliance, and what do you hope to learn or share with the network?

Romero: It is an honor to be part of the Alliance, as we are fully committed to the financial inclusion of women. We believe that one way we can reduce the gender gap is by providing the necessary economic and productive impetus for more women to lead their micro, small and medium-sized businesses.