The experience gained from a long process of learning from the projects executed in the communities of the northern Chimborazo, especially in the Calpi Project – CRS/BID, implemented by the technical team that currently constitutes GSD, has enabled this Foundation, with support from the Corporation “Food Support Program – PL480/USDA, Kellogg Foundation, Catholic Relief Services, and Inter-American Development Bank, to consolidate an innovative proposal of alternative financial services, utilizing the mechanism of the Community Development Bank (CDB).

The basic structure of this process is the alliance among the Community Development Banks, International Banks and PROMERICA, and the GSD Foundation, without ignoring the initial support from the Solidary Bank who made an important contribution to this process.

This experience, which was initiated in the communities of San Juan in 1993, today extends to the communities of Calpi, San Andrés, and San Isidro in the northern region of the Chimborazo Province, and as entering 2010, to 64 community banks that cover more than 2,300 women of family and young people over 16 years old.

Community Development Banks (CDB)

The CDBs are the alternative structures of the informal credit in the financial market, set up as a support tool for the community development of the poor population, which channel economic resources into encouraging the development and diversification of the productive activities, supporting the women’s organizing processes, giving access to the decision-making process in the community life, and improving the living conditions of the family in general.

These community banks are administrated by women and set up as a heritage of the community. They constitute of the mother representatives of family and young women over 16 years old, who are the residents of the community.

A community bank is comprised of the Administrative Unit, consisting of the Manager, Treasurer, and Secretary, with the responsibility of managing the resources and their organization; and the Control Unit, consisting of three members, with the responsibility of monitoring the compliance with its rules. These units are renovated every 2 years by the General Assembly.

The Community Development Banks receive, through the International Bank and PROMERICA, funding for GSD at an interest rate ranging up to 16%, to a maximum term of 12 months. In turn, the CDBs channel resources into their partners at a maximum rate of 18%, leaving 2% in favor of the community bank for its capitalization.

The average amount the CDBs brought to their partners reach, by 2010, between US$ 300 and 600 for the production credits, and up to US$ 300 for the emergency credits, especially those for health, with the maxim terms of 12 and 3 months respectively.

The initial credit amount of GSD for the community banks is annually decreasing in relation to the capital that the bank is building, so that, within 5 years, the credit fund becomes completely owned by the banks, releasing, in this way, the capital of the credit fund of GSD, which, in turn, becomes an individual credit fund, in favor of the partners qualified by the community banks, for the credits for production, education, access to the housing bond of the Housing Ministry (MIDUVI), home improvement, and bathroom construction.

Individual Direct Credits

The extraordinary management skills of women in the administration of the community banks, shown from 1993 to 2010, reached zero nonperforming loan and zero lost loan, the results that motivated GSD to negotiate, with the Corporation PL-480 USDA, funds for the creation of a new financial product, which are specified in the individual loans for the partners qualified by the CDBs.

Consequently, more than the credits brought by the CDBs, the best qualified partners can access the credits of up to US$ 3,000, in a cycle of 6 to 9 or 12 months. These credits are implemented by GSD in collaboration with the International Banks and Promerica, as a part of a strategic alliance for the population in the situation of inequality.

Educative Credits

The Educative Credit aims at facilitating the decent access of students to the education center, with the amount of $40 for the elementary school students, $60 for the middle school and high school students, and up to $120 for the university students, channeled through the community banks with funds from the Kellogg Foundation.

Credits for the access to Bond of the Housing Ministry (MIDUVI)

In order to access the housing bond of the Government of Ecuador, which is implemented through the Housing Ministry (MDUVI), GSD provides the homeless families with the credits of up to US$ 500, a counterpart amount that this housing program requires.


Credit for the Home Improvement

And for the objective of GSD, which is to support the improvement of the life quality of the families in the situation of inequality, there exists the alternative of opting for a loan of up to US$ 300 for the home improvement, used to purchase the furniture of bedroom and kitchen.


Credits for Bathrooms

The purpose is to require that all families linked to the community development banks should have the bathrooms with running water, in order to eliminate the traditional latrine which functions as a factor of infection. For this purpose, GSD channels the credits of $150 into the installation of bathrooms and shower baths.