NextBillion.net - Development Through Enterprise - Latin America

Banco do Nordeste's CrediAmigo: Microfinance Banking

Seema Patel — Thu, 07 Dec 2006 16:59:44 -0500

Managing Organization: Banco do Nordeste

Activity URL:

http://www.nextbillion.net/files/BancoNordeste.pdf

Activity Description:

An estimated 15.7 million people in Brazil work in the informal economy as microentrepreneurs, outnumbering formal sector entrepreneurs by more than three to one. Of these informal microentrepreneurs 93% run profitable businesses. However, 84% of these microentrepreneurs did not have access to credit.

In November 1996 at a meeting in Fortaleza, the World Bank and Banco do Nordeste, a development bank formed to support growth in northeastern Brazil, decided to initiate a collaborative process to jointly implement a local development program based on the idea of micro-credit. Motivated by the fact that small informal companies – family owned and small properties - were not being served by the Bank's financing activities due to the restrictive regulation of Brazil's Banking Systems, Banco do Nordeste and the World Bank decided to develop and launch a pilot low-income bank, targeting micro-entrepreneurs from informal sectors.

When asked why Banco do Nordeste decided to launch a microcredit institution, executive director, Stelio Gama Lyra Junior responds simply “we are a development bank; it was a logical step”.3 The fast growth and success of the CrediAmigo program suggest that he might
be right. After only three years in operation, CrediAmigo had already become Latin America’s second largest microcredit institution both in terms of number of loans and the amounts invested.

With the experience gained trough its pilot program, CrediAmigo officially launched its microcredit program and has continued to grow steadily. In fact, it has achieved 40% growth each year since 1998. As of May 2003, CrediAmigo has 123,203 active clients with an active portfolio of R$72 (US$ 24.69) 9 million and an average loan size of R$ 581.35 (US$ 199.33). CrediAmigo offers loans at 3.5% monthly rate (approximately 51% per year). As an incentive for customers to pay on time, CrediAmigo reimburses its customers 15% of their interest payment when their loan is paid in-full and on-time.10 The maximum loan size allowed is R$4,000 (US$ 1,371.51). In the future, CrediAmigo plans to continue to expand its services throughout the northeast of Brazil, as well as offer greater product/service selection such as savings accounts and insurance products.

Click here to read the full report on CrediAmigo.

EcoCreto - Protecting Mexico's Aquifers

Seema Patel — Thu, 09 Nov 2006 16:56:39 -0500

Managing Organization: EcoCreto

Activity URL:

http://www.ecocreto.com/

Activity Description: Mexico City is built over an ancient lake, yet in recent years has found itself facing a serious water scarcity problem. This is due in part to the city’s drainage system, built to prevent flooding, which directs the area’s water more than 250 miles away into the ocean. The result: Mexico City is sinking and its water tables are running dry. Government officials estimate that more than 95 percent of the city’s water is not returned to the region’s aquifers and in some places the water tables are dropping three feet per year. When Nestor de Buen, and his co-founders discovered EcoCreto in the lab, they thought their product might be the perfect solution for this environmental challenge.

Agora Partnerships - Beyond Microfinance

Seema Patel — Thu, 02 Nov 2006 15:15:20 -0500

Managing Organization: Agora Partnerships

Activity URL:

http://agorapartnerships.org/

Activity Description:

Most aspiring entrepreneurs in poor countries are caught in a development blind spot. Too big for microfinance, too small for traditional lending, they represent perhaps the greatest under-utilized asset of poor countries.

Agora Partnerships is a community of development and investment professionals, volunteer consultants and entrepreneurs committed to launching and growing successful, socially-responsible businesses in emerging markets. We leverage investment in areas where inefficient capital markets and other formidable barriers to entrepreneurship have prevented talent from achieving its full potential.

AmazonLife - Natural Latex

Seema Patel — Thu, 02 Nov 2006 14:11:32 -0500

Managing Organization: AmazonLife

Activity URL:

http://www.amazonlife.com.br/store/

Activity Description:

AmazonLife harnesses the power of business to produce Haute Couture products that support local communities and conserve the environment. In the early 1990s, João Augusto Fortes and Beatriz Saldanha, cofounders of Brazil’s first eco-product store EcoMercado, found value in a natural rubber material extracted from the Amazon region of Acre. Rubber production worldwide was shifting from natural latex to oil-based chemicals and from small scale rubber tapping to large plantations. This forced many rubber tappers to shift to commodities markets such as timber and cattle, causing vast degradation of the forests.

The Sun Shines for All Initiative - Rural Electrification in Brazil

Seema Patel — Thu, 02 Nov 2006 13:12:36 -0500

Managing Organization: Fabio Rosa

Activity URL:

http://www.nextbillion.net/files/DistributedSolarEnergy_3.pdf

Activity Description:

Approximately 25 million people in Brazil do not have access to electricity. Fabio Rosa, a local social entrepreneur, is aiming to fill this need through low-cost rural electrification models to improve the quality of life for the rural poor and to slow urban migration.

Proteak - Sustainable Selling of Teak Wood

Seema Patel — Thu, 26 Oct 2006 15:25:43 -0400

Managing Organization: Proteak

Activity URL:

http://www.proteak.com/

Activity Description:

Proteak’s founders, Hector Bonilla and Javier Diaz Calvo have created a profitable, sustainable teak company in a sector otherwise marred by illegal logging and corruption. Hector’s talent for spotting market potential led him to create three startups before a drive past a plantation in Mexico inspired him to research the sizable $12 billion global teak market. Both Hector and Javier were impressed by teak’s price, which is increasing at a rate of six percent annually and commonly sells at $12 per board foot, as compared to $2-$7 per board foot for most other woods.

Proteak’s vision is to operate as a business that addresses social, environmental and economic concerns. Because of its commitment to sustainable business practice, Proteak serves as a model in an industry in which illegal logging runs rampant and the major regions of production in Southeast Asia experience deforestation rates of about one percent per year. Hector candidly asserts that he does not see a separation between profits and sustainable practices. His group is committed to promoting responsible forestry practices and soil management. The 820 hectares of land that Proteak has planted are treated with the minimum possible amount of chemicals, and the trees populating these plantations take in the equivalent of 5,000 cars worth of CO2 emissions every year. The company is also committed to providing benefits for the local community; it is working to reinvigorate agriculture in a region where manufacturing has come to dominate, and Proteak employees receive better pay and benefits than the average worker in their sector.

When discussing these social concerns, Hector is quick to add that he and his board are fundamentally “all about numbers,” and argues that his 50 investors have been drawn in primarily by the 24% projected return on investment. Hector credits his management team with being one of the best and most knowledgeable in the industry. The company has bolstered its marketing strategy with extensive support from New Ventures, a program of the World Resources Institute dedicated to spurring investment in sustainable enterprise. With these strong management and marketing abilities, Proteak has raised $4 million of capital in five successful rounds of investment. In a sector notoriously controlled by inefficient, state-run companies, the Proteak team’s impressive private sector background makes them stand out as a highly productive and profitable enterprise.

Proteak’s superior business model and experienced team combine sustainable practices and solid leadership to create a reliable strategy for growth. This approach earned the company recognition as a winner in the 2005 New Ventures Mexico Investor Forum and ensures that as it sells its first trees on the open market next year, Proteak will continue to thrive.

Rainforest Expeditions - RFE

Seema Patel — Thu, 26 Oct 2006 14:24:52 -0400

Managing Organization: Rainforest Expeditions

Activity URL:

http://www.perunature.com/

Activity Description:

With years of guiding experience, Eduardo Nycander and Kurt Holle created Rainforest Expeditions (RFE) in 1992. Located in the southeast of Peru in Madre de Dios, RFE educates tourists about conservation and sustainable development while providing job opportunities to the local community. The company runs four complementary ecolodges: the 18 room Tambopata Research Center (1992), the 30 room Posada Amazonas (1998), the 24 room Refugio Amazonas (2005) and the recently opened 18 room Konchukos Tambo, near Huascaran National Park north of Lima.

Among these lodges, Posada Amazonas is renowned for its unique partnership with the community of Infierno. RFE offers financing and experience, while the community provides labor and local knowledge of the natural environment. And while profits are split between the company and the community, ownership belongs to the latter.

The community-owned lodge is delivering great outcomes. Not only is it generating profit for RFE, but it is also placing the company in the limelight for potential clients and investors, creating a buzz around the fact that it fully engages a local community. For the Infierno community, it provides full ownership and a participatory process that allows it to pursue long term visions for sustainable development both within the community itself and the wider Amazonian region. In addition to its annual income of over US $250,000 and more than 30 permanent full time positions, Posada Amazonas has also led to the creation of four other small businesses in the community.

With over 50 employees, the recent addition of Refugio Amazonas, and the development of new products ranging from shorter 2-3 day general tours to an array of specialized tours (e.g. birding tours, academic tours), the company continues to attract new investments with plans to expand to other communities in the Andean region. RFE demonstrates how well-managed ecotourism can achieve environmental protection, social benefits, and economic growth.

Berni Labs - Distributing "Bug Balancer" Pest repellant for farmers

Seema Patel — Tue, 24 Oct 2006 14:34:30 -0400

Managing Organization: Berni Labs

Activity URL:

http://www.nextbillion.net/files/rv19-bernilabs.pdf

Activity Description:

Several years ago in Los Mochis, Mexico, an early morning fire in an agrochemical warehouse released massive amounts of toxic fumes into the environment, causing serious health problems for the local population. This was the first in a series of ecological disasters that convinced Jorge Berni, a longtime resident of the agriculture-dependent community, that farmers needed a safer solution for crop control than the heavily toxic pesticides upon which they had relied.

Berni combined his training in chemical engineering with his twenty years of experience as an organic farmer to produce Bug Balancer, a chemical solution that serves to repel harmful pests that destroy farmers’ crops while attracting beneficial insects that are the natural predators of those pests. Local farmers quickly became interested in this solution when they began noticing that while their crops were being ravaged by insects, Jorge’s remained relatively unaffected. Word quickly spread of the benefits of this new, safe formula, and Jorge created Berni Labs in 1994 to increase distribution of the increasingly popular product.

Bug Balancer is an ideal solution for Mexico’s numerous small farmers. The formula is cost effective, as its price is ten times lower than some of the leading pesticides and it eliminates the need for expensive spraying equipment, reducing the cost of application by 20 percent. Bug Balancer is also safe for the environment and for the health of agricultural workers who have been forced to utilize traditional pesticides for a lack of competition. The natural formula includes a number of herbal extracts such as garlic, and it can even be applied with workers still in the field.

Today, Berni Labs has continued to achieve new levels of success as it taps into a growing demand for organic crop cultivation in Mexico. The company’s small team of 14 had its most lucrative year in 2005, generating nearly $1 million in sales by working with 17 distributors across the country. Berni Labs has also begun to expand its operations internationally, winning an enterprise competition with Mexico’s Ministry of Economics to receive government support for research and expansion into the Canadian market.

As Berni Labs continues to establish Bug Balancer as a safe and affordable alternative to pesticides, the company has begun research and field testing on other products to be released in coming years. This includes a formula for shrimp farmers to increase their yields that is based on Bug Balancer technology as well as a project to meet the needs of small ranchers that will inexpensively produce large amounts of livestock feed in a heavily condensed space.

Aires de Campo

Seema Patel — Tue, 10 Oct 2006 16:47:54 -0400

Managing Organization: Aires de Campo

Activity URL:

www.airesdecampo.com

Activity Description:

Aires de Campo taps into an emerging base of "conscious consumers" by selling locally produced organic food products at a competitive price.

When Pablo Muñozledo decided to build an organic store in 2001, there was no major market for such products. Unlike in the United States, where companies like Whole Foods were growing rapidly by appealing to eco-friendly consumers, these services were not in high demand in Mexico. It is in this environment that a pioneering entrepreneur created a company that sought to support local organic farmers by delivering their high quality products to the urban residents of Mexico City.

EcoLogic Finance

Ethan Arpi — Wed, 09 Aug 2006 11:08:16 -0400

Managing Organization: EcoLogic Finance

Activity URL:

http://www.ecologicfinance.org/index.html

Activity Description:

EcoLogic Finance (formerly EcoLogic Enterprise Ventures) is a nonprofit offering affordable financial services to community-based businesses operating in environmentally sensitive areas of Latin America and select countries of Africa and Asia. Targeting the rural credit market, EcoLogic Finance provides loan capital to support low-income communities whose business activities foster environmental conservation and grassroots economic development.