The Latin American Development Fund (FOLADE), was founded in 1993 as an initiative of The Latin American Association of Promotion Organizations (ALOP). However, since its beginnings it has worked as an autonomous trust of NGOs --of all Latin American countries-- that are interested in finding novel financial mechanisms for development and reaching higher self-sufficiency levels.
FOLADE originally grouped 14 organizations from 13 countries of the region. To date, its membership has increased considerably: organizations with a solid career and wide experience in technical cooperation and the provision of financial services for the social economy, (small and micro-businesses, and the building of social infrastructure), have joined the trust.
The deep transformations that have recently taken place in the geopolitical sphere have affected the Latin American economic and social environment, and particularly the field of international cooperation.
As a result of such changes:
In the face of this panorama, new types of responses are being developed; new systems to secure financing are surfacing, and there are changes that may be observed regarding cooperation and the financial criteria used by multilateral organizations. The cases of canalization of resources from such entities --through local NGOs-- to predetermined projects are no longer the exception. Yet the relationships between multilateral organizations and NGOs are mediated through complex and expensive negotiations, and a series of technical conditions and regulations to which NGOs are not used to.
This is precisely one of FOLADE's main challenges: to help fill in the institutional gap existing between the new financial resources and the NGOs working with the excluded sectors of the population throughout the region.
There have been also substantial modifications in the economic activities of the excluded sectors of the Latin American population with which NGOs work. For instance, a group of small producers and micro business that are now in conditions to operate with reimbursable capital, has been consolidated. In other words, this group is now able to run into debt, but has no access to the conventional financial system.
In response to these realities, the NGOs have established a series of mechanisms to provide credit and other financial services to such a segment of the population. However, this mechanisms must be modernised, the volume of resources must be widened, and they have to open a new variety of services that respond effectively to the needs of these productive groups.
This is another important challenge accepted by FOLADE: to support the consolidation and modernization of financial specialised mechanisms to work with that segment of the economy that makes up the basis of any strategy of an equal, sustainable modernization process.
MISSION AND LINES OF ACTION
FOLADE's mission is to provide technical and financial services to entities working in the various Latin American countries with the excluded social sectors, which have no access to conventional financial schemes. The organization then hopes to make a contribution to the institutional modernization and consolidation of such entities.
Its strategic lines of action are:
STRATEGY AND SERVICES
FOLADE bases its strategy on the advantages offered by the presence of its affiliates throughout the region, which allows it to operate in a descentralized manner. Because FOLADE has its roots in Latin American NGOs, it has first-hand knowledge of the institutions which it serves and a unique capacity to mobilize their existing technical resources.
At the same time, the scale of FOLADE's operations and the fact that it is a regional organization enable it to obtain and mobilize resources efficiently from international and multilateral cooperation and investment sources. The process of securing and mobilizing resources is achieved by establishing strategic alliances and promoting resource leverage mechanisms.
FOLADE offers the following services to its affiliates and all organizations which qualify as users:
FOLADE operates as an association based in Costa Rica. The main components of its organ izational structure are:
FOLADE is the owner of CORFOLADE, a corporation registered in Panama. It offers facilities for financial and administrative operations, which because of their character are more easily undertaken by an entity with a corporate legal status and structure.
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