Fondo Esperanza traces its roots back to 1966 when the Fundación Ayuda y Esperanza, an organization affiliated with the Hogar de Cristo network, was created to provide services to the poorest sectors of Chilean society. Hogar de Cristo is a socially-oriented institution founded by Saint Alberto Hurtado. In 2002, Fundación Ayuda y Esperanza was restructured and Fondo Esperanza, an organization whose mission is provide financial services to micro-entrepreneurial Chileans, was born.

At present, FE is the largest Chilean microfinance organization, providing solidarity micro-loans to economically vulnerable populations. Its main objective is to overcome poverty in Chile by incubating small businesses and providing a holistic range of microfinance services: loans, entrepreneurial education and network promotion. Fondo Esperanza uses a Communal Banking methodology.

As of June 2010, Fondo Esperanza has 30 offices throughout the country, 39,000 clients (87% of them women), and a repayment rate of 99%.

Comprehensive microfinance services

Loan Plans: Loan amounts begin around 100 USD and gradually increase from one loan cycle to the next. Loan installments are paid off on a weekly or bi-weekly basis.
Entrepreneurship School: Fondo Esperanza started its Entrepreneurship School with the goal of providing its entrepreneurs with better, more varied educational tools. This school is one of the fundamental pillars of support allowing low-income people to become empowered and develop small businesses. Through a thoroughly outlined Adult Educational Plan, entrepreneurs are given access to a weekly or bi-weekly space for continual development in which they are the protagonists of their own learning and personal growth.
Promotion of Social Networks: Creates or strengthens connections between entrepreneurs, communal banks and the local community to improve self-management abilities and promote human and commercial development.

Methodology

Fondo Esperanza funds economic activities through its Communal Banking methodology. Communal Banks are groups of 18-25 people who live in the same area and join together in order to collectively receive small loans. Group members provide one another with a solidarity guarantee of repayment, meaning that if one member does not repay their loan, the rest of the group will. Each group member has an independent business. Communal Banks are based on five fundamental principles: solidarity, responsibility, trust, honesty and respect. Communal Bank members incorporate these values into the way their group functions, remembering these principles throughout the existence of their Communal Bank.

Each Communal Bank serves as a weekly or bi-weekly meeting space in which members track repayments, monitor the evolution of group members’ businesses, and receive entrepreneurial education sessions. Groups engage in a variety of different activities intended to strengthen each participant’s personal abilities and nurture the networks that connect entrepreneurs with other local actors, while simultaneously contributing to local community development. These meetings are coordinated by Communal Bank Advisors (ABC, “Asesores de Bancos Comunales”), who are members of Fondo Esperanza’s staff.