IIV Mikrofinanzfonds Class I

Invest in Visions GmbH

Ecuador is a republic in the northwest of South America and is located at the height of the equator with a population of 17.6 million people. The current political situation is characterized by unrest and demonstrations. In mid-June 2022, there was even an 18-day strike. The reason for the dissatisfaction was not only the rising fuel and food prices, but also the low budget for education and health.
Currently, about a quarter of the population lives in income poverty, i.e., on less than $87.57 a month. In rural areas, the figure is as high as 43 percent. The average income is just USD 310, which is below the legal minimum wage of currently USD 425 (as of August 2022). Nearly 90 percent of Ecuadorians earn less than USD 750 a month, while the cost of the food basket to provide for basic needs has risen to USD 751.04 a month due to inflation - and the trend is rising.
According to the Federal Ministry for Economic Cooperation and Development, the official unemployment rate rose to 5 percent in 2020. Prior to that, it had fallen from 8.5 to 3.6 percent between 2007 and 2019. Nominal gross domestic product (GDP) per capita was an estimated USD 6,412 in 2022. With a GDP share of 12.4 percent in 2020, the trade/hospitality/hotels sector is a key economic driver. Nevertheless, this sector recorded negative growth of 8.7 percent in the same year.
This need is also known by Banco Desarrollo, a private financial institution with a social vision that supports the local and integral development of the Ecuadorian population in popular rural and urban areas, providing financial products and services.
27-year-old Juliana Durán is one of Banco Desarrollo's microcredit borrowers. She lives in the city of Cuenca and has been selling meat and sausages for three years. With a loan from Banco Desarrollos, she bought a chop and meat cutter so she could offer high-quality meat products and a cutting service. This has allowed her to boost her business and increase sales.