Rural micro-credit: Uruguay aims to increase ceilings and beneficiaries

 microcredito foto IFAD

The II Meeting of the Committee on Local Credit of the Rural Micro-Credit of the Ministry of Livestock, Agriculture and Fishing of Uruguay was held. “Thank you for all you have given and keep on giving to the country”, said President José Mujica to the rural people who participated in the meeting.

Data on the evolution of this credit tool were presented, and workshop dynamics were used to evaluate and plan the development of rural micro-credit.

Rural micro-credit is now almost ten years old. Its intended beneficiaries are family producers, rural employees and people living in locations of less than 5,000 inhabitants.

It consists of three lines of credit that cater to the needs of production, basic family needs and home improvement.

The program’s goal is to “meet the short-term financial needs of rural people with no access to formal credit” says Gregorio Martirena, responsible for the development of this financial tool.

Micro-credit seeks to “create local organizations that decide how funds are used, based on trust, personal knowledge and social control. What needs to be highlighted is that this public policy is based on social control and the endorsement of the neighbors, which facilitates access to credit for those who request it and who usually do not have any guarantees or payroll slips, and can only offer their word as guarantee. We have tried to restore its worth to the word given, to encourage commitment and social responsibility” said the government representative.

The Rural Micro-Credit Program is run in coordination with Fundasol and the people that make up the Local Credit Committees.

From the meeting emerged the need to include more young people to participate at a local level; to reach regions that have not yet been tapped (especially very sparsly populated regions); to raise awareness; to include in the dissemination strategy the MGAP Rural Development Councils; to raise the ceiling for the first loan and for maximum loan limits; to increase the amounts for housing and to add new lines of credit.

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