An assets based approach for enhancement of financial inclusiveness

An assets based approach for enhancement of financial inclusiveness

Quilalí, NicaraguaTegucigalpa, Honduras
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We are a not for profit organization who's vision is to develop and promote alternative solutions for sustainable local economic development opportunities.

About Project

Problem: What problem is this project trying to address?

We address the problem to solve through four dimensions 1. Strong barriers of entry for financial services for underserved communities (especially women) for generation of endogenous and resilient local economic development. 2. Strong patterns of consumerism as opposed to investment and entrepreneurial activities in relation to money received via remittances, creating weak local money flows that affect demand and supply dynamics that translate into revitalization of the local economy. 3. Paternalistic schemes from target groups and insufficient funds from implementing institutions to grant cash start ups for small businesses. 4. High costs of sending fees of remittances and unavailability of nearby agencies to collect them, posing a security threat for families who travel to collect them.

Solution: What is the proposed solution? Please be specific!

Our solution is twofold: internalization of outward money flows through administration of remittances via mobile phone, into a local business network, and, a local campaign for revitalization of local money flows and entrepreneurism based on already existing assets. Remittances are administered by senders using special software developed by STRO, to be used for purchases related to fulfilling immediate needs of remittances receivers in a local business network. Also, community workshops will be delivered on awareness generation on how each individual is an agent for change if most of his expenses and investments take place within the community (the more times money changes hands, the more income each person has), promoting an entrepreneurial attitude towards unfulfilled market niches, providing services of coaching for regeneration for potential entrepreneurs who wish to establish a new business idea.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

A mother of two is trying to thrive in her “quesadillas” business. She has tried to sell them to the local markets but they have refused due to her low production capacity. She has also tried to raise funds through a small loan but has been declined by local financial institutions due to her inability to produce collateral. Her husband sends a small monthly remittance that she must collect in town, which is 20km away from her community, which supposes a security threat from carrying cash on public transportation where assaults frequently occur. After attending an awareness generation community workshop, this woman finds more clients willing to buy her products, including local small stores. She has also found support to upgrade her business through the coaching for regeneration sessions, pre-selling "quesadillas" tickets to her neighbours, who pay in advance and collect their product on the weekends. Her father has agreed to lend her one cow to diversify her business and start salling also cheese, having one of her teenage daughters help her on the weekend. Also, her husband now pays directly to local stores from the US a monthly fixed amount to provide groceries, thus, she has to travel to collect the remittance less often, and carries less cash with her.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

We have no competence regarding our approach to local economic development, since our project does not grant money or technical assistance to our target groups, but spaces for joint analysis of local money flows and how they can benefit the local economy through behavioral changes and new business start ups, using already existing assets and networks. Regarding remittances, our competence are transnational agencies such as western union, which do not reach the local level that this proposal pursues regarding a local business network. Both instances therefore complement already existing efforts for improving access and use of financial alternative services for the economically disadvantaged.

Founding Story

Our moments: Seeing how many people were active using cell phones, although the area of Quilali is very remote and isolated, we saw great potential to use them to increase connectivity and access to financial services for this underserved community. People were also very hopeful in knowing that they wouldn’t have to travel far anymore to collect remittances, due to high robbery rates in the area. Also, we noticed many young men drinking beer early in the morning, who received remittances, complaining about unavailability of jobs. We then thought that through assets based approach, these young men could realize how to make idle resources work for them, through promotion of entrepreneurism instead of consumerism of remittances received. in the words of the regional director of a partner implementing institution: “If I had known of this approach before, we would have streamlined it and used it in our programs for development a long time ago, given the sustainability it implies.
About You
Social Trade Organisation
About You
First Name


Last Name


About Your Organization
Organization Name

Social Trade Organisation

Organization Country

, FM, Tegucigalpa

Country where this project is creating social impact

, NS, Quilalí

How long has your organization been operating?

More than 5 years

Has the organization received awards or honors? Please tell us about them


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How long have you been in operation?

Operating for more than 5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two


Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

The main objective is to disseminate an innovative system that involves migrants in local economic development processes of their rural geographic area of origin, facilitated by the use of mobile phones, informatics, economic literacy workshops and the construction of community endogenous regeneration values. This project addresses problems related to migration and remittances as well as the opportunities that this fact brings along, through an integral approach. The goal is to generate a 15% costs reduction regarding transference of remittances through the use of internet based software, improving their use by spending them in a local rural business network through the use of POS and SMS, strengthened by a local campaign for maximization of local money flows for generation of LED.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Other (Please describe below).

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:

Alternative endogenous solutions for complementing financial services

For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

We hope to spread our approach to rural communities in Honduras, El Salvador and Nicaragua. These communities are characterized by economical activities related to subsistence agriculture, small businesses, high levels of migration to the U.S. (implying remittances) and employment in sweatshops in the closest bigger cities. The communities we wish to approach show high levels of isolation from regional economic activity, due to weak infrastructure regarding roads, which indirectly leads to lower levels of access to education and health. Also, previous development interventions have created dependency dynamics among people in these communities, meaning that their inhabitants expect to receive financial support from institutions who implement projects, which is a behavioral pattern we expect to transform.

Could your solution work in other geographies or regions? If so, where?

Yes, our solution can work in any region that displays similar characteristics to the ones described in the last question, which are very common in rural Central America. Our actions are appropriate for communities that show high levels of income generated through remittances and low levels of economic growth linked to investment of remittances received, thus , showing strong pattern of external consumerism and great potential for revitalization of the local economy. The model can be replicated wherever there is unavailability of convenient local systems to collect remittances that would help avoid exposure to robbery and security risks. Furthermore, according to current research in the field of remittances, senders often feel frustrated because they have little influence on how the money they send is spent by their families back home. Our model can work in any community where remittances senders would like to be more involved in the investing and spending decisions their families make

If your solution is dramatically successful, how will things be different in 10 years?

We expect our model to have consolidated and still be generating benefits to the local community due to a behavioral voluntary change on the perception of poverty by our target group. In ten years, we imagine people in rural communities of the central American region enjoying the benefits of having established their own small businesses, creating a vibrant local economy where offers and demands successfully meet. We also expect to have generated higher levels of satisfaction from remittance senders, who would fully support the creation of a better socio economic environment in their communities. Finally, we expect our model to have geographically spread into other communities in the Central American region, through partner local institutions.

What will have had to have changed to make this happen?

Changes required to make this happen can be seen in progressive steps. The first change regards a mindset change towards appreciation of local assets, including creativity, reliability and self-esteem by our target group. We expect to achieve this change by delivery of tailor made community workshops and coaching sessions tackling these pressing issues. On second instance, remittance senders would have to be motivated by a better use of the money they send to their families back home, which we expect to accomplish through awareness generation campaigns regarding the potential of local money flows to boost the local economy. Finally, we would have to be able to fully develop our activities at pilot level and to disseminate results among the region, to spread the methodology and its benefits for its users.

What has been the impact of your solution to date?

So far, we have implemented our solution through the first stage of a pilot project. Technical results have been achieved, such as running feasibility studies, coverage investigations of the mobile network, etc., but the main results regarding improvements in the local economy are yet waiting to take place after settling necessary technicalities in the field. However, due to community workshops on awareness generation on the importance of local money flows, remittances receivers have already increased their consumption patterns towards local products, as evidenced by a local cooperative store.

What is your projected impact over the next five years?

Remittances transferred through this channel add 10% multiplier effect in the local economy. 15% of the remittances sent through the local business network can be used to create additional credit by partners.For example, in two different communities, 2000 clients will receive remittances via mobiles, leading to90% reduction of time collecting and 10% cost reduction. Also, we would expect 4000 migrants from the target group use the system to transfer remittances.We expect 10% of participants develop a business idea and request coaching, 1/3 of which implement ideas in less than year (250 created businesses).Proportion of business ideas implemented with remittances’ funds increases in 30%, and 60% of the participants acknowledge change in consumption patterns benefitinf the local economy.

What barriers might hinder the success of your project? How do you plan to overcome them?

The innovative character of the methodology poses a challenge, given that project officers are merely facilitators of local community mobilization and “coachers” of entrepreneurs (in case they request it), not advisors or experts that provide solutions to local communities. This shift demands openness towards a behavioral change from the project officers and a break-down of assistentialist patterns from communities. To overcome this, STRO provides close advisory and includes additional methodological “reinforcement” sessions to the basic training program, including also adaptation to specific conditions of the target group. Regarding remittances administration, some countries have intricate regulatory processes for approval of our procedures. To overcome this, we advance legal work before

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Institutional teams trained in our approach to LED

Task 2

Business network for remittances administration organized and set

Task 3

Awareness on the importance of local money flows has been developed by local population

Now think bigger! Identify your 12-month impact milestone
Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Institutional teams are able to replicate our approach to LED

Task 2

Business network for remittances administration in full operation

Task 3

Behavioral changes in respect to spending and investing patterns have taken place; new local businesses have been set.

Tell us about your partnerships

The new economics foundation is our mentor in the proposed methodology, after undergoing an adaptation to the Latin American context. We maintain contact with NEF through monthly virtual meetings, along with different organizations who are implementing the methodology in Brazil, Israel, Mozambique and South Africa, to share lessons learned, techniques and ideas.Implementing partner organizations have been: World Vision/ Honduras, the NGO REDES in El Salvador, FAO and the Human Development Center (CDH in Spanish, funded by NGO CESAL) in Honduras, and the cooperative “20 de abril”in Nicaragua

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?


What type of operating environment and internal organizational factors make your innovation successful?

Full participation of partner local institutions, strong consultative processes with them, highly participative processes to approach target groups and high value of innovation over precision, which fosters continuous improvements in classical approaches to local economic development. Also, continuous networking with institutions worldwide who use alternative approaches to economic development allows us to further innovate on out own proporsals.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list