Community: Spring 2005
SOCIAL TOPICS (Archive):
The NICA Fund
Published, Spring 2005
Genaro and Albertina Lopez live in a squatter village on an abandoned
airstrip outside the city of Ocotal, in northern Nicaragua, one of the poorest
regions of the country. The poverty they live in is sobering. The floor of their
house is dirt. One can see through the spaces between the boards of their
hastily built house. They have few possessions, and the clothes they wear are
threadbare. By any conventional standard, they appear to be a terrible credit
Genaro and Abertina have received credit, however, from the Foundation for
the Development of Nueva Segovia (FUNDENUSE) through a group lending program.
FUNDENUSE is one of 13 microcredit groups in Nicaragua that received capital
from the Nicaraguan Credit Alternative (NICA) Fund, a credit program
administrated by the Wisconsin Coordinating Council on Nicaragua. WCCN is a
nonprofit organization based in Madison, , that channels money from socially
responsible investors in the United States to alternative credit organizations
FUNDENUSE is one of the few microfinance institutions in Nicaragua that uses
group lending methods where borrowers co-sign on each other’s loans in lieu of
collateral. Because of FUNDENUSE’s group lending program, people like Genaro and
Albertina have access to credit and the opportunity to make their lives better
through their own efforts.
Genaro and Albertina have a small store in their house and a small nursery
outside. They sell fruit trees to neighbors. Genaro also does construction work.
The credit gets used to buy tools and stock for all of these ventures. The Lopez
family is new to microcredit, but the benefits are already evident: They are
building their businesses and improving their lives while making all of their
interest and principal payments on time. Albertina says that before she got
access to credit, she assumed that she would live poor and die poor. Now she
sees hope that she can live a comfortable, dignified life.
Nicaragua has one of the youngest microcredit industries in Latin America.
The first microcredit organization in Nicaragua was founded in 1991, and WCCN
has been involved since then. In 1998 WCCN launched its current lending program,
the NICA Fund, to expand its outreach and partner with the best credit providers
in the country, such as FUNDENUSE.
It is fair to say, though, that despite its youth, after a period of learning
by doing and after receiving technical assistance from different international
organizations, Nicaragua’s microcredit industry is now very well consolidated.
In fact, it is the star of the microcredit industry in Central America, with the
biggest portfolio and the biggest number of borrowers reached. That is an
amazing accomplishment and a sign of hope for a country that is the second
poorest country in the Western Hemisphere.
Currently, the NICA Fund is lending to 13 partner organizations, and has an
outstanding portfolio of around $5 million dollars. All the partner agencies of
the NICA Fund have a 100 percent record of repaying their loans in full and on
Carlos Arenas is Executive Director of Wisconsin Coordinating Council on
Nicaragua. For more information, U.S. investors can call (608) 257-7230 or visit