Expansion of microfinance program

Summary

Serving microfinance clients in the rural parts of El Salvador

AMC El Salvador is the microfinance offspring of the NGO ADEL-Morazon which was created after the civil war to bring social and economic development to a part of the country whose inhabitants suffered much from that war. The MFI was founded in 2000 and by the end of 2015 had a loan portfolio of approximately USD 18 million and 12.138 active borrowers.

Background

AMC El Salvador, whose head office is located in San Miguel, has a strong regional presence in the department of Morazan. but has offices in other parts of the country as well. Its main shareholder is the NGO ADEL Morazan, which was created to address the needs of the poor after the devastating civil war. It’s mission: ‘We are a financial institution that offers specialized services to the sector of micro and small enterprises, workers that employ activities for their own account ane employed staff with low income, on a national scale, operating within a framework of economic viability and social responsability, that guarantee our sustainability and the satisfaction of our clients, staff and investors. It is part of a holding that has established more AMC’s in Honduras, Nicaragua and Guatemala. After going through a difficult period it finds itself in the middle of a comprehensive turn-around process, with the first positive signals of renewed growth.

Initial situation

At the 31st of December 2015, the gross outstanding loan portfolio of AMC El Salvador was USD 21,0 million, while the number of active clients was 12.138.

Goals

AMC El Salvador is in the middle of a comprehensive turnaround process, after a series of years during which it decreased in size and in number of clients. It has introduced new products (credit card, pensions, voluntary savings, insurance), improved internal operations, efficiency and its corporate image, all of which should result in moderate growth during the coming years. To fund this growth Cordaid has approved a loan of USD 1 million. With an average disbursed loan size of USD 1.249 our loan will serve approximately 800 clients, most of which are located in rural areas.

Target group

AMC El Salvador serves both urban and rural clients. It is serving micro and small enterprises, with a range of loan products. The conditions of these loans are tailor-made (duration, repayment mode, collateral requirements) for the kind of business whose financial needs they serve. It is piloting new products which are important for its clients: solidarity group loans for a segment of poor women, loans for young entrepreneurs and credit cards.

Project plan

The organization is implementing its Strategy Plan 2015-2018.

Sustainability

AMC El Salvador is offering their clients a broad range of loan products, with different conditions, depending on the type of business of the client. Apart from loans, it is offering savings products and has started recently with insurance and a pension saving scheme. Bringing these products to clients that have problems linking to the banking sector, is of great importance to them. The institution itself applies a sustainable business model, . Since its start it has been operating with a profit which enable sthem to build up solvency and invest in the future.

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