Networks

The microfinance sector in Argentina began in the 1980s. It brought together infant institutions, voluntary enterprises, and new lines of action from a few pre-existing organizations. The mid-90s brought about the start of Foncap (Social Capital Fund) was added as an important new player in the young sector; Foncap is a body of the government whose mission is to promote, strengthen, and finance microfinance institutions. Despite this seemingly encouraging start and the achievements of microfinance organizations on the international level, the sector was not to be consolidated in Argentina for many years to come. In 2001 Argentina experienced a national crisis marked by profound economic recession, and the levels of poverty, unemployment, and informal employment reached extremely high numbers. It was within this context that the microfinance sector was converted into a tool for overcoming these problems, which were threatening more and more vulnerable families every day. From this moment on the sector began to develop more rapidly, with new microfinance institutions cropping up across the country. The majority of these institutions are located in zones of extreme poverty and isolation. They work with people whose income is below the line of poverty, but have some sort of productive enterprise. Without a doubt, these institutions currently reach very few of their potential clientele; in fact, they only serve approximately 1.2% of their potential market . The Argentina Microcredit Institution Network (RADIM) began its development in 2004, within the framework of the “Ser Solidario” program promoted by the Telefónica Foundation. This program brought together a diverse group of microfinance institutions—operating with different scales and methodologies, but undoubtedly working towards the same goal—for the first time. Under these circumstances the microfinance institutions (MFIs) realized their need and desire to form an arena in which they could exchange experiences and information. From this initial encounter and the informal group that followed came the possibility to incorporate new participants. With these new participants, the group began to analyze if conditions were favorable for advancing towards a formalization of what had started out as a friendly exchange between peer institutions. In mid-2005 the network’s eight founding institutions—along with five supporting organizations from the microfinance sector—put together a two day workshop. During those two days, the participants debated and agreed on the basic principles of the new institution, and eventually founded RADIM.
All of the institutions present in the foundational meeting shared the conviction that access to credit and accumulation of capital—physical, productive, human, and social—would constitute the core of the new network’s strategy. RADIM would be formed as an integrated group of self-sustaining microfinance institutions. They would support development and human advancement with professionalism and transparency, in regards to both the recipients of the microcredit and the other partner organizations. In this manner RADIM came to be a second-tier non-profit entity, whose principal objective is to help its members by harmonizing their strategies, articulating programs in their best interests, and aiding in their institutional growth. In accordance with this mission, RADIM also works towards the improved planning and training of MFIs and actively represents these institutions in dialogs with the state and with civil society. The following institutions are founding partners of the RADIM network: Fundación Banco Mundial de la Mujer, Entre Todos Asociación Civil, FIE Gran Poder S.A., FIS – Fondo de Inversión Social S.A, Fundación Alternativa 3, Fundación Grameen Mendoza, Fundación Progresar y Fundación Pro Vivienda Social. Asimismo, la formación de RADIM fue posible gracias al apoyo de los socios adherentes: Fundación Telefónica, Fundación Ford, Etimos, Foncap, ProBono y GPS. RADIM is currently composed of eight Argentine MFIs, serves approximately 18,600 clients (72% of whom are women), and has an average portfolio of USD 1,095,591.20. Also, these member institutions have a total of 105 credit assessment officers that work in 29 agencies distributed throughout the northern and central regions of Argentina. There is no doubt that national and international lenders, as well as donors, have only recently taken note of the Argentine microfinance sector’s growth. This new attention has permitted not only the improvement of existing microfinance activities, but also the beginning of outreach measures. We hope that these activities will lead to the true take-off of the microfinance industry in Argentina. Hide