Financial empowerment could improve the quality of life in rural communities

Close to 20 percent of Latin Americans live in rural areas. In other words, more than 126 million people live in non-urbanized areas, and usually perform primary production activities, with little training on how to make their entrepreneurships grow. 

In the face of this reality, CAF, Development Bank of Latin America, decided to implement an impact measurement of the Prider program, in alliance with the Financial Development Corporation (COFIDE, for its acronym in Spanish). This initiative seeks to improve the life conditions of families that live in rural areas. 

The program consists of providing training to Savings and Loans Unions (UNICAS, for its acronym in Spanish), or multi-family self-managed associations, where the seed capital involved is contributed by the members. The representatives of the UNICAS receive training from COFIDE on subjects related to organization, management, and accounting, agreeing, after that, on internal functioning regulations among which the following stand out: the level of obligatory savings that members must contribute in each session, regulations regarding possible loan beneficiaries, amount of the loans, and interest rates. In this type of initiative, it is the members of a community who establish norms and rules, allowing the program to be applicable and scalable. 

Currently, the program is implemented in 76 communities of Peru, where 119 UNICAS have been created, with a total of 1,514 members. Initial results show that the Prider program encourages participants to prepare or improve the business plans and study the market. In addition, more than 50 percent of participants are women. 

The main challenge faced by this impact measurement, which will see its results on the last quarter of 2016, is to achieve relevant results when comparing localities, both treated and untreated, as in each community, the UNICAS form quickly and in sufficient numbers.