FACES Finances Entrepreneurs in Ecuador
Written by Lynn Hamerlinck on 18 April 2022
The newest addition to Lendahand is microfinance institution FACES - short for Fundación de Apoyo Comunitario y Social del Ecuador - and checks off all the boxes regarding our intended social impact. FACES is an NGO set up in 1991 to support small entrepreneurs with microloans. The non-profit MFI mainly serves women, making up 54% of their client base, and operates for 57% of their portfolio in rural areas.
Reaching the Bottom of the Pyramid
To fulfill their goal of successfully combating poverty and unemployment in Ecuador, FACES supports SME entrepreneurs to help them grow their businesses and generate more income.
Ecuador has approximately 900,000 businesses, 99% of which are microenterprises and SMEs, which create 60% of all jobs1.
Via their network of 19 branches, FACES currently serves small entrepreneurs in 4 provinces offering individual and group loans. The provinces they operate in are among the poorest in Ecuador, with almost half the population living below the poverty line. Most economically active people work in agriculture, raising cattle, sugar production, woodworking, or the handicraft sector.
In a previous blog post, we elaborated on how financial inclusion is essential for the growth of entrepreneurs at the Bottom of the Pyramid (BoP) in emerging markets. The BoP is the largest and poorest socio-economic group in a community. By offering them access to capital, entrepreneurs can improve their financial situation, resulting in more income, job creation, and economic prosperity. In other words, it allows people to work their way out of poverty.
Microfinance Institutions such as FACES are Lendahand’s gateway to reach the people at the Bottom of the Pyramid, thanks to their local presence. Lendahand investors already crowdfunded €1 million for Ecuadorian company BWISE, which offers mobile payment solutions to SMEs in Latin America, allowing entrepreneurs to have digital track records of their transactions to apply for formal loans to grow their business.
Ecuador: World Leader in Female-led Enterprises
According to the WorldBank, Ecuador is a world leader in female-led enterprises. However, access to financing is more limited for these enterprises than for similar enterprises led by men. FACES focuses on addressing this gender gap identified in the financial sector.
In 2020, 53.88% of their clients were women. 50.55% of the microenterprises financed are managed by women, who mainly operate in the informal economy. One of them is María Hortensia, whose exquisite family recipe for peanut sandwiches grew fame and traveled all over Ecuador thanks to access to credit.
She applied for her first microcredit with the FACES Foundation 25 years ago to start her sandwich business "Bocadillos Los Molinos". With a loan of $1,000, she bought the necessary raw materials to start her business. A second and third loan allowed her to purchase toasting machines and mixers, which has allowed her to produce more sandwiches and reduce costs. With the financial support and advice from FACES, María Hortensia managed to create work for herself and her family.
Creating Social Impact on Ecuadorian Society
In many ways, the NGO is committed to generating a meaningful social impact within the Ecuadorian Society by providing its services to the most vulnerable sectors of the population. Besides having their loans go mainly to women to support their entrepreneurial activities, FACES supports farmers with green loans to develop sustainable agriculture.
Within the organization, they also engage in a high presence of female staff members (55%) and female management board members (45%). During the pandemic, the whole team committed to ensuring their free training program for customers to provide financial, technical, social, and health education. They carried out the training program virtually and managed to train 1,617 people. Of those, 61% were women.
FACES' gender focus and social engagement also translated to their social responsibility program called "My First Cradle", to prevent premature death due to newborn asphyxia. 2020 was the third year FACES delivered around 64 cradles to clients and employees. All to contribute to a good start to life for newborns of customers, regardless of their social status.
We're excited to welcome this microfinance institution and NGO organisation on our crowdfunding platform today. Are you looking for a tool to empower SME entrepreneurs in emerging markets like Ecuador? A way to encourage (female) entrepreneurs? Sign up for your free account today and visit our projects page for FACES’s first project.