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 AFODENIC's risk rating with a higher level of granularity. As a result, AFODENIC's risk rating will now be displayed as 2.5 stars instead of 3 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.
 
AFODENIC 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 that previously. Kiva will continue to update the Kiva lender community if the situation changes significantly. 

Special notice on Afodenic from Kiva Staff on June 7, 2010:

Kiva recently conducted on-site monitoring at Afodenic in order to re-assess the level of risk posed by this institution. The analysts found that a number of components that Kiva looks at during our due diligence process did not merit a 4-STAR rating and adjusted the rating to 3.

About AFODENIC

AFODENIC, La Asociación para el Fomento al Desarrollo de Nicaragua, seeks to use micro-credit to foster productive commercial activity for the sake of economic, social, and cultural development within vulnerable urban and rural sectors traditionally neglected by commercial banks. AFODENIC, which was established on May 12, 1999, is a non-governmental organization based in the capital city of Managua. Working on a national level, AFODENIC has branches in Managua, Juigalpa, and Nueva Guinea.

The organization strives to fulfill its mission by integrating economic and human resources in order to provide and adapt financial services aimed at improving the economic statuses of the families of clients—individual producers, organized cooperatives, and small and micro-entrepreneurs from both the city and the countryside.

AFODENIC provides micro-loans for agricultural activities, livestock cultivation, and house repairs, as well as microenterprises/small businesses. The organization’s clients in the farming industry work in a range of areas, including breeding, milk production, and the cultivation of pineapple, plantains, vegetables, coffee, fruit-bearing trees, and basic grains.

In 2006, AFODENIC began providing micro-credit within the most vulnerable neighborhoods of Managua, such as Hialeah, Memorial Sandino, Barrio 360, Villa Reconciliación, Laureles Sur, and Laureles Norte. AFODENIC has contributed to the improvement of these neighborhoods through the creation of jobs, improvements in home infrastructure, and the maintenance of small businesses.

One of AFODENIC’s most successful programs was the construction of nearly 500 homes in Juigalpa for people in the healthcare, education, and municipal services sectors. AFODENIC sought to combat the area’s housing shortage by building low-cost housing that could be purchased on credit at a low interest rate. The project, which was developed with the support of the city of Juigalpa, contributed significantly toward alleviating the housing problem in the area.

AFODENIC has worked on several social projects in the department of Chontales in conjunction with the Rural Institute of the Tropics. Together they have established various technical assistance and training programs, which have included assisting cooperatives with administrative and legal consolidation, creating a center to train farmers in the use of new agriculture technology, and teaching basic computer programs and Internet use.

As a social institution committed to improving the country, AFODENIC partnered with the Center for Socio-Educational Research at the UNAN-Managua University to promote research within the classroom at schools in Managua and Carazo. Also in the realm of education, AFODENIC recently initiated a new credit program to fund loans to students studying at universities or technical schools.

The organization’s funders have included Fundación Barceló, PTM-Mundubat, and Oikocredit. In addition, AFODENIC is affiliated with the Association of Microfinance Institutions from Nicaragua (ASOMIF), which is part of the Central American Microfinance Network (REDCAMIF).

AFODENIC began working with Kiva in early 2008 and has a 2.5-star field partner risk rating. 


Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva Dec 16, 2007 Oct 12, 2005
Total Loans $5,374,100 $591,510,100
Amount of raised Inactive loans $0 $801,625
Number of raised Inactive loans 0 640
Amount of Paying Back Loans $817,925 $116,887,025
Number of Paying Back Loans 1,036 124,445
Amount of Ended Loans $4,556,175 $473,821,450
Number of Ended Loans 7,557 601,157
Delinquency Rate 4.18% 4.15%
Amount in Arrears $19,720 $3,134,116
Outstanding Portfolio $471,693 $75,521,492
Number of loanDelinquent 95 14,058
Default Rate 0.66% 1.13%
Amount of Ended Loans Defaulted $30,148 $5,346,749
Amount of Ended Loans $4,556,175 $473,821,450
Number of Ended Loans Defaulted 75 16,817
Currency Exchange Loss Rate 0.01% 0.09%
Amount of Currency Exchange Loss $349 $538,403
Refund Rate 0.37% 0.77%
Amount of Refunded Loans $19,925 $4,537,625
Number of Refunded Loans 31 5,064

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 63.03% 74.18%
Average Loan Size $622 $418
Average Individual Loan Size $622 $655
Average Group Loan Size $4,547 $1,828
Average number of borrowers per group 7.4 8
Average GDP per capita (PPP) in local country $3,636 $3,429
Average Loan Size / GDP per capita (PPP) 17.10% 12.20%
Average Time to Fund a Loan 9.57 days 5.6 days
Average Dollars Raised Per Day Per Loan $64.98 $74.70
  Average Loan Term 12.72 months 10.35 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 3,574 296,133
  Journaling Rate 40.08% 42.36%
  Average Number of Comments Per Journal 0.04 0.08
  Average Number of Recommendations Per Journal 1.87 1.87

Borrowing Cost Comparison (based on 2012 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 14% PY 27.00% PY 33.27% PY
  Profitability (return on assets) 5.7% 0.9% -1.45%
  Average Loan Size (% of per capita income) 131.70% 40.00% 40.88%

Country Fast Facts

Field Partner Staff

Yessy Bodden
Lismary Chacón
Moyra Cruz
Rosa Esmeralda López
Elizabeth Mejía
Fernando Montiel
Francisco Montoya Galeano
Sinthia Morales
Dania Ojeda
Yadira Quiroz
Gema Rodriguez
Marcela Solis