Asomif pushes for new microfinance bill to secure US$40mn credit line

Friday, May 27, 2011

Nicaraguan microfinance association Asomif has called on congress to pass a new microfinance bill that would secure an up to US$40mn international credit line, local daily El Nuevo Diario reported.

Asomif president René Romero said that the proposed law would establish clear rules for the microfinance sector, something which is needed to generate trust among international lenders.

Nicaragua's microfinance sector has been severely hurt by the "No Pago" - or "I won't pay" - movement, with many debtors refusing to pay back their microloans, sending delinquency soaring and pushing some microlenders into bankruptcy.

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The movement has received tacit support from left-wing President Daniel Ortega's government. The new bill emerges from that controversy as the sector struggles to get back on its feet.

Romero said that the Central American bank for economic integration (Cabei) would receive approval of the bill as a "positive sign" and that it could act as an important intermediary with lenders in Europe and the US.