Fondo de Desarrollo Local (FDL), Spanish for "the Local Development Fund," is a micro-finance institution that provides both capital and financial services to those in Nicaragua who have no access to traditional banks. FDL targets micro-, small- and medium-sized rural businesses, but also works in urban contexts to help economically viable businesses that have no access to the formal banking sector. Through its programs and services, the organization contributes to social and financial sustainable development.
FDL's programs seek to promote successful development and are directed at the reactivation of Nicaragua's economy of farmers and craftsmen. The programs focus on reform and the stimulation of production to address the problem of slow and stagnating economic development. FDL's programs include a land titling program, applied macro-economic and sector research, especially for the timber, textile and leather industries, technical assistance and training for small business, and promotion of adapted technologies and capitalization for small rural enterprises.
gives several types of loans that support its mission and goals.
- Agriculture Loans, directed at subsistence farmers, come with low interest rates and have loan terms of two to three years.
- Commerce and Service Loans, intended for microenterprises, come with interest rates of four percent, and have terms between one and three years.
- Housing and Consumption Loans, intended for farmers, come with interest rates between three and four percent, and have terms between three and four years.
- Small Industry Loans, targeted at microenterprises, come with interest rates of three percent, and have terms between one and three years.
FDL serves the Nicaraguan community's small and medium-sized business people. Approximately 60 percent of FDL loans serve rural, agricultural businesses, while the remaining 40 percent support micro-business activities of commerce, service, small industry, consumption and housing for salaried workers. Due to an increase in retention, 62 percent of FDL's clients in 2005 were women, up from 56 percent in 2004. Recent studies have also shown that FDL's clients make greater investments in their children's health and education than other families with similar incomes but without access to credit.
In 2005, FDL significantly expanded their social coverage, especially to reach poor rural and urban micro-businesswomen. This was possible due to the successful adoption of both joint liability credit methodologies and of training/technical advice services adapted to the particular needs of each social segment. FDL's investment in farming has increased farmers' incomes by promoting the development of cattle activity and improving productivity, while simultaneously reducing environmental deterioration. As of December 2005, FDL had a loan portfolio of US $34.6 million, a default rate of only 0.2 percent, and had served 52,049 clients.
José Nicolás Aguirre Alemán says, “I’ve been working the land for 20 years. I’ve also worked in raising pigs and cattle. I’m a diversified farmer, in that I grow maize, beans, citrus fruit and vegetables and mainly sell the fruit harvests.
FDL has helped me a lot. I’ve bought land, obtained a vehicle, rebuilt my house and above all my economic situation has changed. FDL has good credit policies, favorable for anyone with the desire to get ahead. I feel satisfied because they’ve never denied me a credit, and resolve what I need in less than 24 hours.”