Microfinance Focus, December 7, 2011: Inter-American Development Bank (IDB) has approved a $50 million loan for expanding microcredit, particularly among low-income women in Ecuador.

The loan will be extended to the National Program for Finance, Entrepreneurship, and Economic Solidarity (PNFPEES) which will contribute to its strategy for fostering economic inclusion with particular emphasis on financing for women entrepreneurs.

The program is expected to benefit up to 25,000 microentrepreneurs by 2015 and will lead to the creation of at least 5,000 new jobs over the next four years.

The program is intended to result in a 60 percent increase in credit available in districts with high levels of poverty, and at least 54 percent of the credit operations will benefit women microentrepreneurs.

The PNFPEES was created in 2009 to provide loans to financial services organizations in high-poverty areas that have limited access to credit.

The IDB loan is for a term of 25 years with a grace period of four years and an interest rate based on LIBOR.

Ecuador has seen a significant expansion in microfinance over the past eight years. The total loan portfolio of microfinance institutions has increased from $73.2 million to nearly $2.5 billion, an average annual growth of 405 percent.

In addition, the total number of entrepreneurs served by this sector has expanded at an annual average of 232 percent over the same period, rising from about 60,000 to more than one million customers.