Social Issue

Ecuador was one of the countries with the greatest inequality in income distribution in Latin America. As a consequence of this situation, millions of Ecuadorians migrated abroad, and many others had to move from the countryside to the city where most of the country’s economic activity is concentrated. In recent years, inequality has decreased and the Ecuadorian Gini coefficient is below the regional average. However, these achievements are at risk, due to the recently implemented fiscal austerity and the appreciation of the dollar.

Our Response

INSOTEC is an NGO created in 1980 to support small businesses in rural Ecuador. In the early 1990s, it began granting microloans in collaboration with the Banco Interandino Americano and the Canadian Development Fund. They have more than 30 years of experience in supporting microenterprises in rural areas and have eight branches that operate in the coastal region and Andean region in the centre of the country.

Its focus is to grant individual loans in the agricultural sector (65% of its portfolio) with an average loan in this sector of $1,555 (which is below the average loan in Ecuador – $3,700). The rest of its portfolio, approximately a third, is dedicated to other productive activities and services, mainly providing life and health insurance. Its non-financial services include financial training, health campaigns, and technical assistance in the agricultural sector.

Expected Social Impact

With this investment of the Netri Foundation, it is estimated that INSOTEC will be able to provide 196 microloans in the country, with the idea of empowering Ecuadorian communities to generate employment.