Congratulations to this week’s winner of the Raffle for Institutional Action Plan submitters, the Agroamigo program of Banco do Nordeste do Brasil!
In the last decade, Brazil has lived an intense period of economic growth reflected in the improvement of the quality of life of its population, and the expansion of credit. While the country is living a time of prosperity, there are many foreseeable challenges in the future, including the eradication of extreme poverty, the reduction of overall poverty, and the closing of the regional inequality gap.
This framework led to the birth of the rural microfinance program Agroamigo, which focuses on the rural poor of the Brazilian Northeast. Because it is a region with severe climatic adversities, the Brazilian Northeast needs special conditions in order to develop productive activities in its rural areas, and improve the welfare of its population. As a development bank, the Banco do Nordeste do Brasil (Northeast Bank of Brazil) has tried to find solutions to this problem, providing the appropriate credit while organizing and establishing viable partnerships for the sustainable development of the Brazilian Northeast. One of its rural credit programs is the National Program for Strengthening Family Farming (Programa Nacional de Fortalecimento da Agricultura Familiar -PRONAF), by which family farms of different sizes are financed by the institution.
Created in 2005, Agroamigo is determined to improve the economic and social profile of low-income farmers from the Brazilian Northeast and the region of Minas Gerais, serving in a pioneering way, thousands of farmers cultivating their land using family labor and earning up to R$ 6.000 (roughly US$3,000) a year. With its own methodology adapted to the conditions of rural environments, the Agroamigo program is focused on comprehensive care and customer service, supervising credit with the remarkable presence of advisors in each community.
Another aspect that makes a difference is the granting of credit in both a gradual and sequential way, thereby enabling clients to acquire financial education and strengthen their own personal economies before taking on higher loans. Related to this is the simplification of processes and the promotion of financial inclusion of family farmers through the availability of other products such as checking accounts, credit cards and microinsurance.
Since its implementation the Agroamigo program has achieved satisfactory results through methodological innovation, results management and partnerships. Sound proof of this has been the gradual growth of its active portfolio. At the end of 2005 the portfolio was around R$14 million (approximately US$7 million) and 18,044 clients. In February of 2012 the program had in its portfolio 747,114 clients and approximately US$ 586.5 million. Cumulatively in these seven years over 1.5 million transactions were made.
Within its field of operation, Agroamigo has also concentrated on inserting women into the labor market. From 2005 to present the number of women in its portfolio has risen from 43% to 47%. This represents approximately 350,000 women developing productive activities and contributing to their family’s income. The Agroamigo program has even been recognized internationally. In 2009 it received the ALIDE award for its best practices amongst development financing institutions and its innovative credit products. In 2001 it was nominated for the ENAP (National School of Public Administration) award for innovative practices in public management and received second place.