Asociacion Costa Rica Grameen, Costa Rica
Grameen Trust initiated a BOM project in Costa Rica, Asociacion Costa Rica Grameen (ACRG), with the financial support of Whole Planet Foundation (WPF) in an effort to alleviate poverty in this country where 18% of the total population lives below the poverty line. WPF has pledged US$ 1,480,916 for the program. In October 2008, WPF has allocated another US$ 120,000 for continuing the operation of ACRG.
Overcoming all the challenges such as motivating potential clients and establishing a trust-based relationship with them, legal procedure of obtaining visa for the Bangladeshi staff of ACRG, language barrier etc. at the initial phase of project implementation, the project has been highly successful in helping the needy and unserved people of Guacimo, Limon and Siqquirres areas to improve their socio-economic condition.
ACRG has introduced three loan products, basic loan, micro enterprise loan and pig fattening loan based on the local demand and business opportunities. Amongst these three, pig fattening loan is very useful for the borrowers, as it is a highly a profitable business for them. Till December 2008, a total of 680 members received pig fattening loan hoping to make good profit out of it. The members of ACRG have been involved in various income generating activities such as selling cosmetics, tailoring, fish farming, pig fattening etc. Many members who have received micro enterprise loans are utilizing the loan money either for expanding their existing business or for starting up new businesses.
One of main challenges that ACRG is facing is the robbery problem. The field officers are often robbed on their way back to the branch office after the collection of repayments and savings of the borrowers. As a precautionary measure, the management of ACRG has decided introducing loan disbursement at the center meetings. Following this system, collection of money and loan disbursement occurs at the center meetings so that the field officers do not have to carry the collected money back to the office.
In 2008, Limon city was affected three times by flood. Twenty center meetings were suspended during this time. Despite that ACRG has been highly successful in increasing its volume of growth in terms of member outreach and loan disbursement. Till 2007, the project served 3264 members through its three branches in Guacimo, Limon and Siqquirres. In this year, the project could increase its member outreach by 3298 and loan disbursement by US$ 1,369,063. Number of loanees for micro enterprise loan and pig fattening loan also increased by 58 and 510 respectively in this year. The project has been enjoying 100% repayment rate since its inception.
As of December 2008, ACRG achieved 56% financial viability. In the phase of augmenting expenditure, this project has planned to revise its rate of interest upward from 20% to 30% (on a declining basis) in order to continue the project operation on a sustainable basis and ensure faster operational and financial viability. Out of three, two branches of ACRG, Guacimo, and Siqquirres are in profit. In order to make Limon branch profitable, staff is trying to reach out to more people and motivate the members to take more of micro enterprise loan than basic loan.
