COFIDES was certified as an institution authorised to indirectly manage the European Union’s (EU’s) cooperation for development budget in 2018. Under the terms of reference of that mandate, in October 2020 the company formalised the Triple Inclusive Finance (TIF) Programme, designed to furnish low-income Latin Americans access to financial services.

"TIF arose from the need to narrow the gap in the Latin American population’s access to financial services, inasmuch as barely 54 % of adults hold accounts in a financial institution, compared to 94 % in high-income countries. That divide is even wider in rural areas, particularly among women and in the lowest income brackets. A further consideration is the need to sustainably foster husbandry, an activity especially poorly serviced and affected by the consequences of both climate change and COVID-19"

Nuria Rodríguez Aller, Head of Unit of COFIDES’s Partnerships for Development Division

TIF is a blended finance initiative supported by AECID, Spain’s agency for cooperation in international development (with FONPRODE loans) in which COFIDES manage technical assistance, the dimension financed by the European Union. Programme design rests on three pillars (financial, social and environmental) and addresses a dual objective: to enhance financial services in the context of Latin America’s social pyramid and further climate-friendly sustainable financing.

Imagen de agricultores latinoamericanos en un mercado

To reach those goals, COFIDES established a combined approach intended to enhance the breadth and depth of Latin American financial service providers attending to micro, small and medium companies (MSMEs) and improve the quality of service from the climate change perspective by furthering sustainability in both financial services and farming practice. Julia Rabadán, senior COFIDES analyst, stresses that "the ultimate TIF targets are urban and rural MPMEs, including medium- and smallholders with no or only limited access to the official financial sector".

With these aims in mind, TIF will support financial service providers attending to regional MSMEs with long-term loans (approximately EUR 55 million) and make access to technical assistance resources available through the European Union’s Latin American Investment Facility (EUR 5.75 million).

"The first blended financing programme headed by COFIDES in Latin America and the first devoted to technical assistance. It will be a key to significantly heighten the impact of financing made available to financial institution beneficiaries to reach the population devoid of such services, mitigating vulnerability and enhancing resilience to the effects of climate change"

Beatriz Morant, senior COFIDES analyst

The three most prominent areas where technical assistance is rendered include:

a) increasing the depth of financial inclusion to extend access to financial services to low-income brackets by creating digital ecosystems with new products or services that will efficiently broaden the reach in rural areas;

b) instituting green microfinance to develop better social and environmental management systems, implement new green products and further climate-smart farming in the region; and

c) introducing institutional reinforcement, ranging from improved strategic planning and governance to financial management, among others.

"Managing such technical assistance programmes is a challenge for the company in the short term for it calls for enormous preliminary work to structure the processes required to award programme resources. At the same time, however, it constitutes a milestone, for it affords COFIDES new opportunities in line with our management qualifications as a European Union-accredited institution"

José Carlos Villena, head of the Partnerships for Development Division

*This publication is part of the COFIDES' 2021 Activity and Sustainability Report.