WPF approach to credit has evolved over time. Impressed with the microcredit movement, WPF initially invested in multinational microcredit organizations like Accion and Opportunity to get capital into the hands of the poor. But WPF moved quickly into supporting Nicaraguan microcredit organizations reaching the agricultural sector, where most poor Nicaraguans make their living.
Small farmer access to credit from the formal banking system was cut nearly overnight with the implementation of Enhanced Structural Adjustment Facility (ESAF) policies in the 1990s, which began a rollback in the agrarian reform of the 80s. In response to this challenge, NITLAPAN, a research and development institute at the Central American University in Managua, founded the Local Development Fund, to provide access to credit to the small scale farmers, a sector that continues to be a challenge for the larger microcredit movement. Since the 1990s WPF has invested in that fund in support of that initiative.
WPF was also one of the first lenders to the newly formed second tier coffee cooperatives (that process and sell the coffee produced by 1st tier producer cooperatives), making some of the first loans to PRODECOOP so they could buy coffee from their producer cooperative members.
But WPF focused most of its lending on grassroots cooperatives, particularly 1st tier cooperatives, both locally owned savings and loan cooperatives (like Hand in Hand Bank rural bank run by women in Waslala) and coffee cooperatives involved in fair trade and organic production.
The need for cash to respond to family needs throughout the year forces coffee farmers to sell most of their future crop to intermediaries, who only pay them 30% of the value they could get at harvest time. With more access to credit, their own cooperatives could lend them that money and ensure that their producers receive the full value of their coffee at harvest time.
WPF continues to follow the research of organizations like NITLAPAN, and does its own research to further refine its loan practices to ensure that their impact advances the expansion of human capabilities of the local peasant organizations, especially women in the countryside.
Web English http://www.nitlapan.org.ni/
Web Spanish http://www.nitlapan.org.ni/index.php