Microfinance management capacity at the service of cooperation for development

AutorFundación ICO

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Capacity building for the management of microfinance services offered by Non-Governmental Development Organization (NGDO), framed in comprehensive activities for development, should be supported in order to: 1) Minimize the risk of negative impact of microfinance instruments, especially micro-credits, and 2) Use them adequately considering the real needs of the clients who are financially responsible to improve their living conditions.

ICO Foundation began its work in the world of cooperation for development in 2006, when it launched its first call for projects supported by Spanish NGDOs and local partners. From then until today, the primary purpose of channelling aid has not changed: to strengthen the capacities of the organizations here and there in order to increase the effectiveness of the cooperation process, or to cut it short: to serve people better.

This framework comes from the vision that those in charge of the ICO Foundation built from their long experience in the field. Cooperation actions, except in the case of some NGDOswith abundant resources, are usually born out of the urgency of using the regular aid offered to the sector to contribute to the fight against poverty in developing countries. With great effort, some small and medium sized organizations implement and continually assess the performance of their work to transform what they have learnt in future projects. But these cases are rare, either because of lack of capacity or lack of financial resources and time for implantation into the organizational culture.

The support of the call focuses on reinforcing some of the most important processes which include the project cycle, specifically the identification and formulation, evaluation and systematization of the experiences.

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Throughout past years, the grants were given out to projects in cooperation in various sectors, such as health, productive development, good governance, environment, education, etc.

Most of the initiatives that involved microcredit and other microfinance instruments did so at the service of other components in which the entities involved had a higher degree of specialization. The articulation of microfinance as being useful to the service of a number of activities in a specific sector may seem theoretically correct, but we should reflect in the "reality" in which it really translates.

We need to acknowledge the fact that the most used microfinance in cooperation, not only Spanish...

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