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| Crimson Capital Selected Projects - Latin America
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Rural Finance Initiative (RFI) in Colombia
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Funded by the US Agency for International Development (USAID), the Rural Finance Initiative (RFI) project in Colombia was designed to promote inclusive financial intermediation in selected conflictive areas, supporting the provision of market-based rural financial services for micro, small and medium size producers and businesses (MSMEs).
Through RFI, Crimson worked with nine partners financial institutions (PFIs) to build capacity and understanding of Value Chain Finance (VCF), with a focus on improving PFI credit risk strategies for MSMEs and farmers; cash-flow based lending techniques; and introducing asset-based financial products. This technical assistance included hands-on support in structuring VCF transactions. Crimson also conducted a VCF training-of-trainers program for RFI staff.
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Promoting Integrated Development (PDA) in Peru
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The goal of the Promoting Integrated Development (PDA) project in Peru is to promote sustainable, licit development in communities and regions affected by illicit coca cultivation in Peru. PDA builds on the previous achievements of the Alternative Development Program, which supported the transition of over 800 communities and 70,000 families (over 60% of them former coca growers) to a licit lifestyle after voluntary eradication of their coca crops.
Under PDA, Crimson Capital managed the financial services component and worked to increase and improve access to finance in Peru’s Selva region through the introduction of new products and training and technical assistance to local lenders and farmers’ cooperatives. The Crimson team is assisted eleven banks introduce a credit-linked savings product which helped rural agricultural producers obtain much needed access to finance. Over $16.5 million in credit was approved to more than 7,450 agricultural producers in the target areas. More than 4,450 savings accounts were opened, totaling over $6.3 million.
Crimson's experts also provided assistance in the development and launch of DCA Loan Portfolio Guarantees (LPGs) with seven financial institutions. These DCA LPGs provide guarantees of $11.5 million (to support $23 million in SME lending) in the PDA target areas.
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Rural Competitiveness Activity (ARCo), Bolivia
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The main goal of the ARCo project was to strengthen the competitiveness of rural enterprises in the Chapare and Yungas regions of Bolivia, thus increasing sales, income and jobs in the licit economy. To increase economic viability, rural producers received training and technical assistance on how to add value to their products, meet market-based demand, and strengthen relationships with processors and exporters.
During the life of the project (2005-2009), Crimson advisers oversaw the Financial Services Unit of ARCo, which worked to open channels of finance for small and medium sized enterprises. Through a competitive process, Crimson’s team selected FIE, a leading Bolivian microcredit institution, to pilot new value chain finance products in the rural markets of Yungas and Chapare. FIE opened five new lending branches in Yungas and Chapare, which now provide full banking services to communities. This innovative program issued over $18.5 million in loans to more than 4,000 clients and created an estimated 3,500-plus jobs. In addition, rural clients opened more than 9,000 savings accounts with deposits totaling over US $4.5 million.
Under ARCo, Crimson advisers also worked to introduce a new type of business registration specifically designed for rural producer associations. The result: a simplified business registration process for rural producers associations, allowing them to legally register their businesses in just three days. Since this new type of business registration was introduced, more than 60 rural producer cooperative associations in Yungas and Chapare have legally registered their businesses and subsequently opened savings accounts totaling over $.5 million.
Crimson’s work in rural Bolivia through the ARCo project is cited as having achieved what donors and IFIs had been attempting for over 15 years without success, and won the USAID 2009 Award for Innovations in Value Chain Finance.
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El Salvador Financial Services for Small and Medium Enterprises
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The goal of this project was to stimulate trade and investment, create jobs and reduce poverty in El Salvador. The project targeted eight financial institutions to expand lending and other financial services to underserved markets and to introduce viable loan products that better serve SME financing needs. Of the eight partner financial institutions selected, six are commercial banks and two are Non-Banking Financial Institutions (NBFIs).
In addition to the work of the resident Chief of Party, Crimson Capital experts provided short-term expertise to help partner institutions develop new working capital finance and leasing products to better reach the SME clients. Crimson’s experts also conducted an analysis of potential products that partner banks may employ to address market gaps.
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Paraguay Poverty Reduction Program
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The Paraguay Poverty Reduction Program took a demand-driven approach to stimulate economic growth and development in three key economic corridors of Paraguay. Crimson advisors worked with selected Paraguayan companies, assisting them to complete trade deals to export their products to European markets, including herbal teas, food products and textiles. Crimson contributed to the project under a subcontract to Chemonics International.
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Colombia Forestry Development Program (CFDP)
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The goal of the CFDP project was to expand the production of marketable and profitable forest products and provide alternative sources of income for rural communities where forestry activities are centered. Assistance focused on connecting sustainable forest-product production chains to domestic and international markets. The project encompassed policy reform, capacity building, market generation activities, natural and plantation forestry management, the development of a Commercial Forestry Development Fund and exploration of new opportunities for trade and exports. Crimson contributed to the project under a subcontract to Chemonics International.
Through CFPD, Crimson provided technical assistance for co-investment fund activities, prepared forestry businesses for strategic investment and designed a forestry fund mechanism to stimulate investment in sawmill operations, including the selection, procurement, and installation of equipment and launch of operations. CFPD project activities benefited more than 3,600 families, created more than 200 jobs, initiated sustainable forestry management activities on 3,000 hectares and established 12 forestry enterprises.
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