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

Access to credit for the development of productive activities, technification, and qualification of employees are important tools to give opportunities to marginalised people and reduce inequality.

Banco VisionFund Ecuador (VFE) originates from a World Vision initiative to allow access to credit to people who were not served by the traditional financial system. Its objective is to promote productive activities that generate income to improve the living conditions of these families and, especially, those of their children. In 1995, it became an independent NGO (FODEMI) and in 2016 it became a bank, expanding the range of services they could offer their clients.

Its purpose was to provide loans to women’s groups in rural areas. Currently, 70% of its clients are women, and 47% live outside the city. The average amount of its loans has recently increased, given its diversification strategy, but it is still too low and represents only 20% of Gross National Income (GNI) per capita.

Expected Social Impact

With this loan, it is estimated that the VFE will be able to provide 780 microloans with the idea of empowering people, especially women.