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Green Microfinance in Latin America

Last week I wrote about crop insurance in Africa, and this trend has also merged in Latin America.  MFIs in Bolivia, Mexico, Nicaragua, and Peru will be the first to receive assistance to help them develop green financial products and reduce their portfolio’s vulnerability to climate change.  EcoMicro assessed twelve MFIs selected through a three-round regional competitive process, and selected four winners.  These winners are:

  • TeCreemos, Mexico: will develop green financial products to finance clean energy and energy efficient solutions to reduce microentrepreneur’s energy costs.
  • Fondo de Desarrollo Local (FDL), Nicaragua: one of the largest rural MFIs in Central America, FDL will combine technical assistance, a loan for investing in adaptation initiatives, and crop insurance to reduce the adverse affects of climate change for its clients.
  • Caja de Arequipa, Peru: with twenty-five years experience providing financial services in Peru, Caja de Arequipa will develop a green financial product for clean energy and energy efficiency to reduce small and medium-sized enterprises’ high energy costs and limit their reliance on energy sources that can be easily impacted by extreme weather events.
  • Banco Los Andes, Bolivia: will further their commitment to green finance by developing a green finance product to reduce energy costs and improve clients’ competitiveness.

With these recent trends towards green microfinance, it is evident that climate change is having great effects in the developing world.  It’s very important for the businesses operating in these regions, including MFIs, to develop ways to deal with the impacts of climate change.  As I’ve said before, climate change can have much more disastrous effects in the developing world.  In the next few years, it will be crucially important to develop financial products that affectively deal with these changes.

About Katherine Rodota

Katherine is a recent graduate from Cal Poly San Luis Obispo where she studied International Business and French. She is currently working at a private equity firm in the San Francisco Bay Area. Katherine loves to travel, and recently spent her summer volunteering in Mauritius.