Central Bank of Costa Rica Certifies the Country’s First Cash-free Microfinance Company

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    Costa Rica has today for the first time a 100% cash-free microfinance institution, certified with Program L of the Central Bank of Costa Rica (BCCR). This is Grameen Costa Rica, a social, non-profit organization that seeks to facilitate the self-realization of women through the granting of microcredits for business development and that, due to their condition of economic vulnerability, do not qualify as subjects of credit for traditional financial institutions.

    With the granting of these microcredits, more than 27,000 women in the country have achieved the necessary financial access to begin to improve their lives and their economic, cultural and social development.

    “The certification of the L or Cash Free Entity Program of the BCCR means that we are the first microfinance company in Costa Rica that does not use cash for its transactions entirely. This required the submission of documents, processes for more than six months and an audit by the BCCR. We have managed to eliminate cash, improving and automating processes and banking for the majority of our clients”, comments Douglas Reynolds, General Manager of Grameen Costa Rica.

    Reynolds adds that currently in Costa Rica there are thousands of people from vulnerable strata who are joining electronic banking and the Fintech trend. “Unfortunately, this trend would be under threat of operational viability, if taxes on bank transactions are approved, which includes transactions carried out by entrepreneurs such as Grameen’s clients, such as the purchase – sale of their products through the SINPE platform, in addition to small transfers to pay for public services or microcredit installments; even worse in times of Pandemic where encouraging the use of cash would increase the risks of contagion”, emphasizes Reynolds.

    Fully supported financing

    In Grameen Costa Rica, credits are provided to women, who, in addition to being facilitated financing, are supported with training and advice for the success of their entrepreneurship in matters related to the business area, but also in areas of personal development such as empowerment and leadership.

    Together, they are followed up on the business through periodic visits by credit counselors to the communities, as well as the support and guidance of their own colleagues with more experience in the program and their ventures. Today the Huetar Norte, Huetar Atlántico, Chorotega and Central Sur regions are served.

    The microcredits range from 200 thousand colones to 2 million colones with terms from three to 12 months for startup and, later, they can opt for financing up to 24 months. The enterprises are very varied, among them, commerce, services and agriculture. We work with a solidarity group guarantee, for this reason the importance of forming in each region minimum groups of 10 women aged 18 and over.

    Grameen Costa Rica, founded in April 2006 thanks to a strategic alliance between the Whole Planet Foundation and Earth University, follows the world standard of the Grameen Bank Bangladesh and its founder Muhammad Yunus, winners of the 2006 Nobel Peace Prize and has a Declaration of Public Utility from the Costa Rican State.

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