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Financial inclusion in rural territories

The Development Financing Center of the MANORCHO inter-communal association in Honduras: An innovative credit model

Year of publication 2020

Place of publication Rome, Italy ;

Pages 14 p.

Author FAO

Publisher FAO ;

Product type Brochure, flyer, fact-sheet

Edition 1

Synopsis (short abstract) Over the past two decades, the Honduras country office of the Food and Agriculture Organization of the United Nations (FAO) has made efforts to design an effective rural financial system that supports the development of small producers and rural businesses. Since 2015, after a successful experience with the development of a network of more than 900 savings and loan cooperatives, it has supported the design and implementation of a new financing model: Development Financing Centers (CFD in Spanish). The CFD is a mechanism for the financial inclusion of rural families, which because of their poverty or structural situation are not eligible to access private and government financial systems. It has three notable features: first, it is based on the cooperation of public and private actors – local governments, producer organizations, civil society organizations (NGOs), private companies, public institutions, and aid agencies – that contribute resources to a fund that provides solidarity financing; second, it considers financing as a tool for development and, therefore, its grant application process is guided by territorial development strategies agreed by the actors involved; and, third, its space of action is inter-communal (association of municipalities), with a territorial and political platform that constitutes a powerful collaborative work space. The MANORCHO CFD, having completed four years of operation, has managed to gather more than 40 contributing partners and work with 90 producer organizations that bring together about 2 200 families, of which 500 have received financing. This model has been approved by the national government of Honduras, which is already injecting economic resources into the fund. Currently, work is being done on capacity development at the central level to replicate the model in other inter-communal associations in the country.

Language English

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