Truelift Recognizes Fundación Paraguaya and Friendship Bridge as Global Leaders in Pro-Poor Performance

Fundación Paraguaya in Paraguay and Friendship Bridge in Guatemala have reached the Leader Milestone, the most advanced stage along the Truelift Pro-Poor Pathway.  This recognition by Truelift is based on the results of Truelift-licensed assessments conducted by MicroFinanza Rating. Fundación Paraguaya and Friendship Bridge are the second and third institutions to achieve the Leader Milestone in Latin America and only the third and the fourth in the world, respectively.  This rarity reflects both the difficulty of achieving the Leader Milestone and the nascent stage of development of Truelift as a global trust mark.

Martín Burt, founder and Executive Director of Fundación Paraguaya, responded enthusiastically to the news delivered by Truelift Co-Chair Chris Dunford, former president of Freedom from Hunger in Davis, California.  “We are so proud to receive this recognition from you and Truelift, whom we consider to be the moral conscience of the microfinance industry.”

Friendship Bridge’s Karen Larson, President & CEO, and Caitlin Scott, Social Performance Manager, wrote: “We are so very honored to be recognized with the Leadership Milestone by Truelift!  As you know, we are not a large organization but we want to make a big impact.  We strive to provide services that empower our clients to fend off and bounce back from shocks as well as pursue opportunities that create a better future for themselves, their families, and communities.  We believe that our commitment to Social Performance Management helps us both maintain clarity of our objectives and be effective in achieving them.”

Carmen Velasco, Truelift Co-Chair and one of the founders of Pro Mujer Bolivia and Pro Mujer International, will formally present the Truelift recognitions at the annual meeting of the Social Performance Task Force, the global coordinative body of the social performance movement for microfinance and financial inclusion.  The meeting will be June 6-8, 2017, in Mexico City.

Fundación Paraguaya Image result for friendship bridge
Fundación Paraguaya Friendship Bridge
Fundación Paraguaya (FP) is a Paraguayan NGO founded in 1985 as a financial service provider in the microfinance mode (a member of the Accion network for many years).  It soon became a pioneer in promoting entrepreneurship among the poor nationwide.  Currently, more than 450 staff in 28 offices all over predominantly rural Paraguay pursues four strategies to eliminate poverty:

  • A microcredit program serving over 86,000 small and emerging micro-entrepreneurs (87% are women) underserved by other financial service providers – gross portfolio in FY2015 was USD 22.12 million with PAR at 3.39% and equity valued at USD 8.92 million. A variety of credit products is offered, both group and individual loans, focused on women and their economic activities, combined with access to training, insurance, and health services.
  • A program of entrepreneurial and financial education for children and youth.
  • A program of financially self-sustainable farming high schools that train the sons and daughters of poor farmers to become their own ‘rural entrepreneurs.’
  • TeachAManToFish, a separate NGO based in London to help spread FP’s financially self-sufficient school model around the world. FP has further established an office in Tanzania to focus its international promotion and support of the school model in Africa.

In addition, FP has become well-known for its programmatic innovation called the Poverty Stoplight.  FP is serious about not just alleviating poverty but actually eliminating poverty among its clients, using its Stoplight monitoring tool to track six dimensions and 50 indicators of multi-dimensional poverty, including income poverty, for each client household.  The client and her/his field advisor can visualize the household’s poverty status by the color of each indicator for the household – red for ‘extremely poor’, yellow for ‘poor’, and green for ‘not poor.’  With this detailed awareness of the household’s problems, the client and advisor develop and pursue a plan for the household to improve where improvement is needed and to ultimately escape poverty altogether – 50 ‘greens.’  Many thousands of households have risen out of poverty through this program.  Martín Burt and FP are very enthusiastic about the potential of this Stoplight program and are actively promoting and supporting its use by other financial and non-financial service providers worldwide.

Friendship Bridge (FB) started operations in Guatemala in 1998 with its Microcredit Plus program for poor women, a form of communal banking integrated with non-formal education.  FB works primarily with indigenous populations in rural areas where the rate of poverty in Guatemala is the highest. While illiteracy and poverty rates are staggering in these regions, the women clients are determined to create positive change.  In 2016, FB had 22,000 women clients.  FB’s average loan size is $318 over nine months with a 3% monthly interest rate, and FB clients maintain a 98.6% loan repayment rate. To borrow, women must first form groups of 7-25 members called Trust Banks.  Each Trust Bank co-guarantees its individual members’ loans and participates in the non-formal education sessions that are part of every monthly loan repayment meeting.  FB now offers to Trust Bank members a number of different loan products as well as human development services that include education, advanced training, mentoring, health care, and programs specifically for FB’s more successful clients engaged in agriculture and artisanal businesses.

FB is currently focused on developing its Client Continuum strategy.  Recognizing that most clients are content to stay with their Trust Banks and the generic services they provide, FB also sees that some clients are ready and wanting to progress along a continuum of increasingly specialized and sophisticated financial services and business development support for their growing businesses.  The idea behind the Client Continuum is to offer programs and services that are relevant and appropriate to clients at whatever their level of development, whether they are first-time clients or long-time clients who have become experienced entrepreneurs in search of new markets.

FB is an unusual Guatemalan financial service provider in that it is owned and controlled by a United States non-profit organization, and the Guatemala operation is the only program of this non-profit.  The program model acknowledges the need for financial subsidy to supplement the financial margin on credit operations in order to sustain non-financial services and expertise from the United States and elsewhere.

For the full list of Truelift milestone institutions, visit the Recognition page.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s