Status Update - June 2016
CEPRODEL has repaid its outstanding balance to Kiva in full, and those funds have been distributed to lenders. As a result this partnership has now been closed. We thank CEPRODEL for the years of collaboration and wish them success in their future endeavors.
Status Update — December 1, 2015
CEPRODEL and Kiva have come to an agreement to end their partnership after 8 years and more than 4 million USD in loans fundraised on Kiva. CEPRODEL is expected to pay their full outstanding balance according to an agreed upon repayment plan which ends in August 2016. Should this partner request to resume fundraising in the future, Kiva will first conduct any additional monitoring and due diligence tasks we believe necessary.
Founded in 1991, the Centro de Promoción del Desarrollo Local (CEPRODEL) is a nonprofit organization (NGO) based in Managua that develops community-based socioeconomic programs to help alleviate poverty throughout western Nicaragua. CEPRODEL develops and provides funding for housing cooperatives for low-income families, provides microfinance loan services to small business owners and livestock and agricultural workers, and has promoted renewable energy and improved water quality by offering loans and subsidies for solar panels, water tanks, filters and pumps.
As of September 2011, CEPRODEL's 106 employees work in 12 offices that serve more than 8,500 clients (49% of whom are women) and numerous cooperatives. The majority of CEPRODEL’s programs aim to boost income for the women of Nicaragua. Such women are often the primary breadwinners in their households, where many of the men have emigrated to the United States, Costa Rica, El Salvador or Spain in search of additional economic opportunities.
In November 2008, the European Microfinance Platform recognized CEPRODEL's “Renewable Energy and Improved Water Quality Microfinance Initiatives for the Rural Sector” with the 2nd European Microfinance Award for Social Responsibility. Its application was also selected as one of the "seven most innovative and promising case studies to disseminate alongside the three winners”, in hopes of inspiring the microfinance sector. The case study was published in European Dialogue Number 2, May 2009. Additional honors awarded to CEPRODEL include Mix Market/REDCAMIF Certificate of Transparency (2005/2009) and Mix Market/REDCAMIF Certificate of Recognition (2008).
Funders of CEPRODEL have included Sostenica, Inc., Inter-American Foundation, Dutch International Guarantees for Housing, BCIE (Banco Centroamericano de Integración Económica), Katalysis Bootstrap Fund, the European Union, Swedish Cooperative Centre, INCOFIN, Oikocredit and Blue Orchard.
In addition, CEPRODEL is affiliated with Habitat for Humanity, the Association of Microfinance Institutions from Nicaragua (ASOMIF), PROMIFIN, the Local Development and Housing Networks, and the International Network of Alternative Financial Institutions (INAFI).
Join the Fans of CEPRODEL Kiva Lending Team or make another loan to a CEPRODEL client when available!
Status Update — July 7, 2011
CEPRODEL has been a Kiva Field Partner for 44 months. During that time, CEPRODEL borrowers have paid back $1,712,625 in loans.
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.
Although the "No Pago" movement appears to be resolved, the impact of the movement — along with the global economic crisis and some climatic events — have caused some of CEPRODEL's clients to have trouble with their businesses. These troubles, and their impact on loan repayments, have hurt the organization financially. That said, CEPRODEL is hoping to make strides towards greater performance given the improvement of the global economic situation and the current successes towards resolving the No Pago Movement.
However, these recent developments have led us to believe that CEPRODEL's risk rating (2 out of 5) may no longer be appropriate given the level of risk posed by the institution. As such, we have reduced their star rating from 2 to 1 stars. CEPRODEL has been informed of our analysts’ findings, and their corresponding drop in rating.
We will continue to facilitate CEPRODEL's fundraising on the Kiva website, albeit at a lower level than before.
We will keep this page updated with further updates as information becomes available.
Status Update — October 4, 2010
On August 24, 2010, Kiva reduced CEPRODEL's risk rating from four to two stars and added alert text to CEPRODEL's fundraising loans. This was the result of a deterioration in CEPRODEL's loan portfolio due to a number of reasons, as discussed in our previous update.
Prior to Kiva's learning of this deterioration, CEPRODEL had increased their postings to Kiva's website. Approximately $100k in additional loans were made after this deterioration had occured, but before Kiva had become aware of the issue and adjusted CEPRODEL's star rating and fundraising limit.
Once we became aware of the issue, Kiva paused the settlements procedure as a precaution. This was done in the event that we needed to refund loans to lenders who had lent new funds after Kiva became aware of the deterioration, but had yet to decide on a course of action. As a result of the settlements pause, on September 1, 2010, CEPRODEL's delinquency rate increased to 40.38%.
During this time, we carefully reviewed the options that would best protect our lenders while simultaneously not putting CEPRODEL (and ultimately other lenders' funds) in jeopardy. After reaching out to CEPRODEL to discuss these issues, we decided to proceed with the refund to the affected lenders. This was done because at the time these lenders made these loans, they did not have the same information on CEPRODEL's portfolio deterioration as Kiva itself had. Also, in this particular situation, we wanted to make sure not to increase Kiva's overall exposure at CEPRODEL.
Once the refunds have been issued and settlement has been reactivated, the high delinquency ratio expressed on the Kiva website should fall from its current level of 51.59%.
Special Notice on CEPRODEL from Kiva Staff on August 24, 2010:
CEPRODEL's delinquency rate has been above historical norms recently; as of August 24th, 2010, its delinquency rate on Kiva was at 16.59%. Kiva explored this and related issues through its quarterly financial review process, during which Kiva requests financial statements from its field partners.
An initial investigation has revealed that much of the cause appears to be related to the global economic downturn and its particular effect on Nicaragua. Nicaragua has been hard hit on several fronts in the last year. CEPRODEL has shared that the economic crisis reduced sales for many small businesses, and reduced overseas remittances upon which many borrowers rely for sustenance. In addition, we've heard reports of a sharp fall in the price of beef and pigs; also that Nicaragua was hit by a drought that further hurt agricultural production.
Since CEPRODEL lends heavily in rural areas for agricultural purposes, their borrowers appear to have been especially hard hit by these factors, causing an increase in their delinquency. The organization hopes that things will start to stabilize with the new agricultural cycle in September. However, given this challenging situation, Kiva has felt it necessary to reduce CEPRODEL's risk rating from four to two stars.
Kiva will continue to work closely with CEPRODEL and provide updates as appropriate.
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 Ceprodel from Kiva Staff on June 17, 2010:
Kiva recently conducted on-site monitoring at Ceprodel 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.
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||Oct 8, 2007||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$1,203,625|
|Number of raised Inactive loans||0||194|
|Amount of Paying Back Loans||$144,425||$145,191,200|
|Number of Paying Back Loans||214||163,527|
|Amount of Ended Loans||$4,146,675||$1,300,076,650|
|Number of Ended Loans||7,904||1,704,858|
|Amount in Arrears||$33,514||$21,703,337|
|Number of Loans Delinquent||214||74,988|
|Amount of Ended Loans Defaulted||$6,847||$22,477,325|
|Number of Ended Loans Defaulted||30||54,469|
|Currency Exchange Loss Rate||0.00%||0.40%|
|Amount of Currency Exchange Loss||$88||$5,836,094|
|Amount of Refunded Loans||$244,575||$9,148,850|
|Number of Refunded Loans||462||8,475|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||63.40%||76.66%|
|Average Loan Size||$527||$395|
|Average Individual Loan Size||$528||$611|
|Average Group Loan Size||$703||$1,772|
|Average number of borrowers per group||3.4||7.8|
|Average GDP per capita (PPP) in local country||$4,800||$5,731|
|Average Loan Size / GDP per capita (PPP)||10.99%||6.89%|
|Average Time to Fund a Loan||8 days||7.41 days|
|Average Dollars Raised Per Day Per Loan||$65.91||$53.30|
|Average Loan Term||11.17 months||11.37 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||0.07||0.03|
|Average Number of Recommendations Per Journal||2.63||0.70|
Borrowing Cost Comparison (based on 2014 data)
|This Field Partner||Median for MFI's in Country||All Kiva Partners|
|Average Cost to Borrower||26% PY||27.00% PY||25.38% PY|
|Profitability (return on assets)||-7.7%||0.9%||-1.35%|
|Average Loan Size (% of per capita income)||71.00%||40.00%||12.34%|
Country Fast Facts
- Official Language:
- Spanish (official) 95.3%, Miskito 2.2%, Mestizo of the Caribbean coast 2%, other 0.5%
- Avg Annual Income:
- Labor Force:
- agriculture: 31%, industry: 18%, services: 50%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 20.36 deaths
- Life Expectancy:
- 57.48 years
Field Partner StaffJosé Luis Aguirre
Mateo Avalos Ruiz
Juan Luis Gómez
Jose Manuel Montes
Juan Carlos Pineda
Miguel Ángel Ríos