Broad-Based Access to Financial Services

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The Broad Based Access to Financial Services Project addresses the needs of productive low-income households, and small and micro businesses, through a financial systems approach, to ease the seemingly worsened access, and inequality over time. The project creates incentives for financial institutions to compete on a level playing field for these clients, and partially finances tools for institutions to reach these clients more cost effectively. The first Component seeks to help the Superintendenency of banks and other financial institutions (SIBOIF) improve the regulations, and supervision practices that it uses to oversee the microfinance operations of commercial banks, finance companies, and the Nicaraguan Finance Institution for Investment (FNI), and, upgrade its technological platform, including the credit information database, and tools used to analyze the actual and projected financial conditions of individual financial institutions. The objective of the second component is to assist the FNI in providing funds to high performing microfinance institutions, both on an agency basis (administering trust funds), and as a creditor (with credit risk-based funds); and, engaging in promotional activities to attract commercially oriented investors, to build its financial resources. The Outreach Expansion Support Services component, will support a simplified transformation process for unsupervised MFIs to become supervisedfinancial institutions individually, or through mergers. This component will respond to industry demands for technical support through partnerships, and by providing fee-based services directly to experienced microfinance and microcredit institutions. The fourth component will monitor the supply and demand of microfinance services, and oversee, and support the Secretary of Coordination and Planning (SECEP) in the implementation of the Financial Services Access Policy, the design of a monitoring unit, and the legal and regulatory framework and supervision arrangements for financial cooperatives. Finally, the last component will support project management in SECEP, and the contracting of administrative services from the Public Sector Reform coordinating Unit (UCRESEP).