La Financiera Nica: Microfinance Growth Strategy in Rural Nicaragua, Managua, Nicaragua

This document profiles the market survey that the microfinance company 'La Financiera Nic' (Nica) undertook in rural Nicaragua.

The document states that:

• Nica had the following four objectives:
  • Secure new capital by attracting new shareholders;
  • Lower the cost of capital for portfolio growth by offering savings accounts;
  • Attain lending technology from a foreign consulting entity;
  • Allow original donors to eventually recoup a portion of their original donation.
• Nica offered individual loans to three sectors: commerce, service and production.

The document describes Nicaragua's internal political conflict and the resultant economic decline.

It goes on to present the results of a market survey that Nica undertook in Jinotega, Nicaragua. The survey found that:

• The supply of finance was competitive with a wide range of financial institutions such as non-government organizations (NGOs), commercial banks, cooperatives, and government-subsidized programs;
• The demand for finance came mainly from small and microenterprises;
• Client credit preferences were varied, ranging from training classes, flexibility in repayments, low interest rates, etc;
• The break-even projection for opening a new branch was optimistic.

The document then studies the market characteristics of Jinotega, focusing on:

• The seasonality of coffee production and economic activity;
• The lack of infrastructure;
• Sector concentration in retail, small businesses and agriculture;
• The importance of coffee production for the economy.

The document concludes by providing a country-profile of Nicaragua.