Status update - November 18th, 2025

Kiva has decided to pause Fudecosur’s access to fundraising loans on the Kiva platform. Due to a current inability to access liquid assets, such as cash or short-term borrowing, the organization has been unable to repay Kiva lenders in full for repayments made by Kiva borrowers. Kiva is actively monitoring Fudecosur’s evolving financial situation and will continue to follow up with the partner in an effort to recover payments due. We will provide additional relevant information to lenders as it becomes available.

Status update — May 5th, 2025

FUDECOSUR is currently facing repayment challenges due to significant hardships affecting the coffee-growing communities it serves. The 2023/2024 coffee harvest was one of the smallest in decades, due to excessive rains and flooding that severely impacted coffee crops. In addition, global coffee prices have declined, and a stronger Costa Rican colón has reduced export revenues for farmers.

These challenges are compounded by the lingering effects of the COVID-19 pandemic, which disrupted labor supply and raised production costs. As a result, many of FUDECOSUR’s clients—smallholder farmers—are struggling to meet their loan obligations. FUDECOSUR is actively working to restructure affected loans and provide support to its borrowers.

At Kiva, we are already in close coordination with FUDECOSUR and are working on a repayment plan to ensure that funds can begin to flow back to lenders as conditions stabilize. We deeply appreciate your understanding, patience, and continued commitment to supporting entrepreneurs and smallholder farmers in times of need.

Kiva conducts regular, ongoing monitoring of all Lending Partners, but only posts status updates here in response to relevant, major changes at the partner.

Partner description:

The Foundation for the Development of Southern Communities (FUDECOSUR) is a non-profit microfinance institution established in 1993 to promote development in the poorest regions of Southern Costa Rica. FUDECOSUR operates in 165 communities located in the cantons of Pérez Zeledón, Buenos Aires, and Coto Brus. As a non-profit, it funnels all income earned from interest payments back into local communities to expand credit opportunities and fund non-financial services like computer education.

The main source of income for FUDECOSUR’s clients is small-scale farming, supplemented in many cases by part-time work for large plantations in the area. To serve the unique needs of the agricultural market -- which runs on the ups and downs of the harvest cycle -- credit is often extended for longer loan terms, with principle payments made once yearly.

FUDECOSUR utilizes the village banking model to facilitate lending and education. This model empowers the communities where FUDECOSUR works by training village residents to run village banks, also known as credit committees.

With dedicated mentoring and guidance from loan officers, FUDECOSUR’s village banks are run by five to seven dedicated volunteers, who are elected every two years by members of their community. Partnering with FUDECOSUR’s loan officers, credit committees are responsible for assessing and approving loan requests, disbursing loans to borrowers, collecting loan payments, documenting all credit requests and exchanges, and monitoring borrower progress. Credit committees are also charged with educating their community members on FUDECOSUR rules and requirements for soliciting, receiving and repaying loans.

These village banks are comprised of a locally-elected president, vice-president, treasurer, secretary, compliance officer and up to two additional representatives who meet twice monthly to receive payments and distribute credit to their local communities. Loan officers from the FUDECOSUR central office visit each village bank once a month to review procedures and approve new loans. A board of directors comprised of elected borrowers oversees this community credit provision and meets at the central office monthly.

Notably, 31% of these elected positions and 35% of loan funds are earmarked for female participants, helping to empower the women living and working in these communities. The village banking model helps mitigate risk by utilizing the intimate knowledge that these communities possess about market conditions on the ground. It also creates a bond of trust in these farming communities between the organization and its clients, ensuring that decision-making starts at the community level. Finally, the ability to obtain loans without having to leave the community helps keep costs down and ensures a low cost of debt for the communities FUDECOSUR serves.

In addition to credit, FUDECOSUR borrowers benefit from free community and business development courses funded by the institution. Free technical training and education courses are provided to increase crop and cattle yields, improve community health and sanitation, and expand alternative job opportunities. Course themes are requested by the village banks, and are coordinated by the FUDECOSUR director and loan officers. They find experts in each field of training, including technical college agronomists for crop cultivation or livestock care courses, and information technology professionals for computer training courses. Village bank communities have benefitted from detailed courses combining theory and practice. Examples include:

• Livestock Health Care and Output Optimization

• Coffee Cultivation and Output Optimization

• Hydroponic Farming Capacitation (to optimize more environmentally-friendly, pesticide-free, fungicide-free, and disease-free farming)

• Food Handling and Sanitation (to improve community health and support start-up food service businesses)

• Computer Training (Microsoft Office for children and adults)

• Sewing/Clothes Making

• Community Recycling

• Water Purification

To support additional village banks for new clients in need, FUDECOSUR opened a second office in San Vito in April 2011. The institution currently operates 45 village banks.

To learn more about FUDECOSUR and its borrowers, see the following resources:

- Kiva Fellow Blog posts:

Bank-O-Mat Under a Hot Tin Roof: Making Non-Profit Microfinance Sustainable

Village Banks BY Farmers FOR Farmers: A Microcredit Labor of Love

Or visit fudecosur.org for more information.