September 11, 2011

As part of an ongoing effort to fully migrate risk ratings to our new and enhanced risk rating system, Kiva has conducted a re-assessment of the level of risk posed by this institution.

During this re-assessment, our analysts were able to gather updated operational and financial information about the institution, as well as speak with key members of the staff. 

Kiva's new risk rating system, which now includes half stars, has enabled us to display Fundación Leon 2000's risk rating with a higher level of granularity. As a result, Fundación Leon 2000's risk rating will now be displayed as 3.5 stars instead of 4 stars. 

We have prepared a blog post with more information on Kiva's new and enhanced risk rating system, along with a chart showing the relative magnitude of the overall changes for Kiva's portfolio.  To view that, please go here: http://www.kiva.org/updates/kiva/2011/09/07/kiva-risk-ratings-now-with-half-stars.html.

Fundación Leon 2000 has been informed of the change in the display of their rating on Kiva's website.

Update from Kiva Staff on July 7, 2011:

In recent years, the "No Pago" movement (a movement for non-repayment of loans) has created concern around the increased risk of loan non-repayment by Kiva borrowers in Nicaragua. As a result, last year Kiva posted a loan alert on Nicaraguan loans, warning lenders about the potential risks of lending to entrepreneurs in Nicaragua. Earlier this month though, the government passed a new microfinance law that has addressed many of these concerns. As a result, the situation appears to have resolved itself and the "No Pago" loan alert is being removed.


We will update this page if there is any additional information available.

Update from Kiva Staff on July 19, 2010:

In order to help you better understand the potential risks of lending to entrepreneurs in Nicaragua, Kiva continues to provide information on the “No Pago” movement (a movement for non-repayment of loans).

The momentum behind the No Pago movement appears to have largely dissipated, as a result of the National Assembly's passage of a law in April 2010. This new law allows delinquent borrowers (as of June 2009) to re-negotiate loans with more favorable interest and terms. Borrowers who were part of the No Pago movement were required to approach MFIs to re-negotiate their loans by May 12th of this year. While many borrowers did approach MFIs to re-negotiate their loans, it still only accounted for a small percentage of the members of the No Pago movement.

For Kiva lenders who previously lent to Nicaraguan borrowers:

  • If your loan had default coverage, then even if your loan was affected, the MFI will cover your loan for the full amount.
  • If your loan did not have default coverage by the MFI: If the borrower you lent to did not approach their MFI before May 12th, their loan cannot be re-negotiated under the terms of the No Pago movement resolution. Kiva is working closely with its Field Partners in Nicaragua to see if any Kiva clients have re-negotiated their loan under this law and will message to lenders accordingly.

For Kiva lenders considering making new loans in Nicaragua: it seems that as a result of the passage of this law and since the term for re-negotiation has passed, the microfinance situation is calmer in Nicaragua than previously. Kiva will continue to update the Kiva lender community if the situation changes significantly.

Special notice on Fundacion Leon 2000 from Kiva Staff on June 18, 2010:

Kiva recently conducted on-site monitoring at Fundacion Leon 2000 in order to re-assess the level of risk posed by this institution. The analysts found that some of the components that Kiva looks at during our due diligence process did not merit a 5-STAR rating and adjusted the rating to 4.

Company Profile

Fundacíon León began operations in 1993 as the first microfinance institution to serve the western part of Nicaragua. Fundacíon León 2000 works to further the development of micro, small, and medium enterprises through credit services and management, applying the best credit industry practices and technical expertise. As of September 2011, Fundacíon León 2000 employs 92 dedicated people working in 8 offices in León, Chinandega, Chichigalpa, Somotillo, Jinotepe, El Sauce, Managua and Nagarote, and serves more than 5,000 borrowers (almost 70% of whom are women). 

  • The Katalysis Network awarded Fundacíon León 2000 its Recognition of Excellence prize. An annual prize awarded to partner microfinance institutions that have shown strong financial performance and achieved high performance standards in microfinance development.
  • Additionally, the Mix Market recognized Fundacíon León 2000 awarding it 5-Stars, in recognition of the overall transparency, quality, and reliability of the institution’s process and information.

Social Programs

Fundacíon León 2000 has the unique aspect of having a social programs department within its walls. Run by five powerhouse women, the social programs department is constantly seeking grants to develop educational and entrepreneurial capacities in and around León.

Fundacíon León 2000 received an Academic Excellence grant from USAID for a two year project to institute new teaching methodologies in Nicaraguan schools. The program will also include increasing classroom resources for teachers and establishing parent-teacher committees and student body organizations.

Another program, sponsored by a joint grant from International Youth Foundation and ARGIDIUS, is skills training program for young persons. 200-300 young persons between the ages of 20-30, will enroll in a multidimensional skills development program. Participants will either follow the entrepreneurial track or the vocational track. Those in the entrepreneurial track will develop business plans to be approved and funded by committee, they will be eligible for special loans as seed money for their business. Those in the vocational track will have internships and 40% will be guaranteed jobs upon completion of the program.

Two annual social programs are the Merry Christmas program, which provides toys to children living in extreme poverty, and Sponsor a Child, aimed at 12 study centers in areas of extreme poverty in the western part of the country. With the help of people who share our motto, "with your help, I can change my life," Fundacíon León aims to provide a supportive education for children in Nicaragua. 

For more information about Fundacíon León 2000, please take a look at this video: Fundacion Leon 2000 Video

Please explore our institution and engage more dutifully with our motto, "Financing with Social Responsibility.”

León, Nicaragua at a glance

León is considered to be the intellectual center of Nicaragua, known as the University City. It is also the birth place of national poet and “The Prince of Castilian Letters,” Rubén Darío. León Viejo was established in 1524 by Francisco Hernández de Córdoba, but the city was razed in 1610 when the Momotombo Volcano erupted. UNESCO declared León Viejo a World Heritage Site in 2000, located 30 kilometers from the city’s current location.

León is the second largest city in Nicaragua with a population of 175,000. It is located in the volcanic lowlands of the country, 20 kilometers from the Pacific coast. It hosts gorgeous beaches and six of Nicaragua’s active volcanoes.

Through a combination of international aid, debt forgiveness and increased exports, Nicaragua is stabilizing its economic policies. The economy of Nicaragua has made significant progress since the Contra War in the 1980s and the devastation of Hurricane Mitch. However, Nicaragua notoriously remains the second poorest country in the Western hemisphere.


Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva Apr 10, 2008 Oct 12, 2005
Total Loans $4,581,825 $585,001,050
Amount of raised Inactive loans $0 $522,900
Number of raised Inactive loans 0 488
Amount of Paying Back Loans $446,500 $118,514,675
Number of Paying Back Loans 517 125,144
Amount of Ended Loans $4,135,325 $465,963,475
Number of Ended Loans 6,822 592,680
Delinquency Rate 1.18% 3.46%
Amount in Arrears $2,535 $2,674,338
Outstanding Portfolio $215,049 $77,270,318
Number of loanDelinquent 19 10,530
Default Rate 0.24% 1.15%
Amount of Ended Loans Defaulted $9,912 $5,337,117
Amount of Ended Loans $4,135,325 $465,963,475
Number of Ended Loans Defaulted 40 16,805
Currency Exchange Loss Rate 0.00% 0.08%
Amount of Currency Exchange Loss $113 $480,684
Refund Rate 1.12% 0.77%
Amount of Refunded Loans $51,350 $4,494,250
Number of Refunded Loans 60 5,038

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 73.74% 74.17%
Average Loan Size $430 $418
Average Individual Loan Size $557 $656
Average Group Loan Size $1,310 $1,827
Average number of borrowers per group 6 8
Average GDP per capita (PPP) in local country $3,636 $3,432
Average Loan Size / GDP per capita (PPP) 11.82% 12.19%
Average Time to Fund a Loan 9.12 days 5.57 days
Average Dollars Raised Per Day Per Loan $47.14 $75.16
  Average Loan Term 11.17 months 10.3 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 3,388 292,205
  Journaling Rate 45.66% 42.36%
  Average Number of Comments Per Journal 0.02 0.08
  Average Number of Recommendations Per Journal 0.96 1.90

Borrowing Cost Comparison (based on 2012 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 46% PY 27.00% PY 33.64% PY
  Profitability (return on assets) -33.7% 0.9% -1.40%
  Average Loan Size (% of per capita income) 55.70% 40.00% 41.35%

Country Fast Facts

Field Partner Staff

Milena Bonilla
Francisco Nicolas Carcamo Amador
Veronica Cortez
Lyvan Apolinar Cruz
Juan José Gómez Arbizú
Sergio Gurdian
Marcos Hernández
Jesenia Mendoza
Yubelka Moradel Benavides