Support Micro-Enterprises Utilizing a Line of Credit

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Through this project, the IDB supported Banco Solidario, a leading regulated microfinance institution that entered the remittances market, in financing the technical infrastructure, training and marketing support needed to establish partnership in a joint initiative with the Spanish Cajas de Ahorro. The agreement focused on building jointly a system to channel directly and efficiently the remittances of the approximately 140,000 Ecuadorians that live and work in Spain. This flow represent 40 of the total remittances sent annually to Ecuador and are growing at an extremely fast pace. Banco Solidario itself has entered into a partnership agreement with the network of credit cooperatives in Ecuador to distribute these remittances throughout the country. The fact the both ends are linked through the formal banking system made it possible for Banco Solidario and las Cajas to process their remittance transaction through a generic transmitting system such as the worldwide recognized Swift system which is a secure/coded data transmitting system, initially designed to send reasonable amounts of money between banks. To make this system affordable for the purpose of sending remittances, las Cajas and Banco Solidario started to use this system to send remittances every other day in order to reach a critical mass of remittances and therefore, lowering the transaction cost considerably. As the amounts of remittances grow bigger, these bulk sending became more frequent and are now made on daily bases.