Cordaid Investment Management recently partnered with ASEI, a microfinance institution in El Salvador. Both organisations are committed to work towards financial inclusion and to support hard-working women entrepreneurs in breaking the vicious circle of poverty.
(Lucia Torres de Ortiz, a dedicated entrepreneur in a port town in El Salvador and ASEI client for the past 14 years. © ASEI)
Almost 30 years after the peace accord that ended years of armed conflict, El Salvador’s economy has grown tremendously. It is the fourth-largest economy in Central America. However, the country continues to face a series of challenges. It is one of the poorest countries in Latin America, with 29% of the population living with USD5.5 per day (World Bank, 2017), and it is a country where only 19% of the poorest have access to finance (Global Findex 2017).
Supporting over 20,000 women with small businesses
ASEI is a microfinance institution (MFI) founded in 1990 with the purpose of supporting very poor people who lack access to finance and belong to the subsistence sector. Their main driver is to contribute to the economic and social development of El Salvador, with a strong focus on small female entrepreneurs.
“ASEI follows the Community Bank model, which states that women are (in most of the cases) the ones who look after the household. If they are supported, the circle of poverty with their children can be eliminated. In El Salvador, this is also the case, most single mothers or entrepreneurial women need working capital to be able to sustain and grow the business that generates income for their family”, says Silvia Solorzano de Valdez, ASEI’s Planning and Development Manager. ASEI enables more than 20,000 female clients to sustain and grow their small businesses by providing not only loans but also non-financial services.
El Salvador is also facing challenging times due to Covid-19. The country is in lockdown and only essential services can operate. ASEI has adjusted its operations to strengthen the remote communication with its clients, learn about their needs, and find ways to support them. Furthermore, ASEI has developed a new product to serve the clients that operate in essential sectors.
Cordaid Investment Management and ASEI
Cordaid Investment Management (CIM) recently provided a loan of EUR 670,000 to ASEI. “ASEI has a very clear social mission that aligns with CIM’s ambition. Both organisations are promoting financial inclusion as a way to create resilience and reduce poverty. With this loan, ASEI will grow its portfolio and provide very poor and vulnerable women with the means to improve their well-being. ” says Priscilla Smit, CIM’s Investment Manager.
Growing a business little by little
Since an early age, Lucia Torres de Ortiz was very entrepreneurial. Forced by poverty, she started selling products on behalf of others during the weekends whilst studying during weekdays. Over time she learned that selling the products she cooked herself was more profitable. She used to sell tortillas, tamales and pastries walking around with a basket in a small port town in El Salvador. Her hard work paid off and she grew her business little by little. “I have been a client of ASEI for 14 years. With their loans, I was able to buy a mill for my business and lately a car”, says Lucia. Now she is planning to expand her business and have a smoothies shop. “My dream is to build a house”, says Lucia.
This short video shows Lucia’s story:
“We serve women entrepreneurs like Lucia because they are among the most vulnerable sectors of the country. Each person in our team works to fulfill our mission to support the Salvadorians that want to improve their lives”, says Juan Carlos Martínez, ASEI’s Business Manager
Combining finance, health, and education
ASEI offers training on business management and financial education (e.g. budget planning and prevention of over-indebtedness). They also organise health sessions to discuss in simple language topics such as breast or cervical cancer. This social MFI also provides healthcare to its clients at the ASEI clinic. “Our mission is social inclusion. This goes beyond the financial aspect, it involves education and health. In El Salvador, the vulnerable sector we serve can’t have access to proper healthcare. We want to give our clients a low-cost option without losing the quality they deserve so that they can be diagnosed on time if they suffer from chronic diseases because knowledge is power. We are proud to provide these health services to our clients and their families, making accessibility a reality.” Sara Segovia, ASEI’s Marketing Manager.
At the branch in San Salvador, ASEI has its own clinic. The MFI is planning to expand its health services to 3 cities with the creation of a mobile clinic.
Read more about Cordaid Investment Management.