Tour Around the World with Oikocredit: Ecuador

Tour Around the World with Oikocredit: Ecuador

July 17, 2012 at 5:11 PM - by Mary Ann Aabye - 0 comments

As a part of our Summer of Microfinance and Cooperatives, Oikocredit’s Yoli Nunez is touring the US, speaking about Social Performance Management in Colombia, Ecuador & Peru. Yoli is the Regional Social Performance Management and Capacity Building Coordinator for Oikocredit’s programs in the northern region of South America. In this Tour around the World with Oikocredit segment, we are highlighting one of the countries she works in: Ecuador.

Tungurahua Province is one of Ecuador’s central provinces, a mountainous region of the country and home of the active volcano Tungurahua and year-round snow covered peeks. It is also the home of Juan Carlo and his wife, rural farmers who work together as livestock raisers and sellers, activities which sustain them and their nine children. But now Juan is also a client of the microfinance institution FODEMI, and his economic situation and quality of live have been vastly improving ever since his first loan of $400.

In South America, the poorest of the population are located in the mountainous north, where 3 out of 4 rural people live below the poverty line! Major problems in this region include lack of land access, isolation from improved health & education services, and lack of access to financial services. Oikocredit, through its South America Northern Region office in Colombia, Ecuador & Peru, has been working to bring financial services to this region’s poorest.

These services are especially needed in Ecuador, where:

  • 32.8% of the population lives below the $1.25/day poverty line,
  • 53% of the rural population lives in poverty[i], and 
  • Only 37% of the population has access to formal credit[ii].

As a commodity exporting country (oil exports account for 58% of total exports!), Ecuador’s economy has long been subject to fluctuations in the global oil marketplace, and recent declining petroleum prices combined with frequent natural disasters and political instability has slowed the Ecuadorian economy; GDP growth since 2007 has averaged only 4.2%, compared to 7.0% in neighboring Peru[iii].

The microfinance sector in Ecuador, however, has experienced steady and stable growth in the recent decade, making it an important source of growth for the economy. Microenterprises employ an estimated 1 million people, which is nearly quarter of the urban workforce[iv]!

Ecuador is one of Oikocredit’s top ten nations for outstanding capital, withabout $25 million in outstanding capital. This also makes Oikocredit the largest funder of microloans in Ecuador[v]. In all, Oikocredit funds 24 MFIs and 4 productive projects, one of which is FODEMI.

Established in 1995 and an Oikocredit partner since 2008, FODEMI is an NGO focused on providing microloans and training to the low-income population of Ecuador. Today, FODEMI has a loan portfolio of more than $8 million, and reaches 35,787 clients, of whom 71% are women and 42% live in rural areas. FODEMI offers clients financial products through community banking, solidarity groups, and individual loans, as well as non-financial services such as training and advisory support.

Juan Carlo received his fist $400 loan through the community bank “Chambapongo”, after his neighbor invited him to join. The money was then invested in a potato plantation and pasture for the family’s dairy cows. Juan is now on his second loan, and working to establish a pig nursery to expand his farm’s activities.

Mayra Sandoval is another client of FODEMI. She is an artisan in Ibarra City making hand embroidery, an art she learned from her mother. “I heard of FODEMI from my neighbors and I got my first loan in 2004, with which I could buy raw materials at an affordable price. At the beginning I bought fabric by meters, and now I can buy fabric rolls and the price lowers considerably.” She is now able to hire workers and expand her business, allowing her to provide an education and comfortable living for her children[vi].

FODEMI is also one of Oikocredit’s many partners that have been working to implement the Progress out of Poverty Index (PPI), a tool that measures client poverty levels developed by the Grameen Foundation (click here to read our blog series on the PPI). 

[i] World Bank’s World Development Indicators –

[ii] 37% of adults aged 15+ hold an account at a formal financial institution -

[iii] Economist Intelligence Unit Reports on Ecuador and Peru-


[v] MIX Market -

[vi] Mayra Sandoval and Juan Carlo’s stories are both courtesy of FODEMI -


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