LENDING IN CRISIS: REIMAGINING FUND IMPACT IN POST-PANDEMIC COSTA RICA

The Fondo de Desarrollo de la Micro, Pequeña, y Mediana Empresa (Fund for the Development of Micro, Small, and Medium Enterprises) is a fund of Banco Popular in Costa Rica. Its mission is to create quality jobs, improve business productivity, and generate new wealth for underserved business owners and communities. Given recent challenges in approving new loans, the bank enlisted a team to reimagine its lending practices and recommit to its social purpose of deploying much-needed capital to current and future businesses. The team’s work included an initial review of published research and institutional reports, interviews with bank personnel and Costa Rican agency officials, and additional interviews with peer development financial institutions in Latin America, the US, and Europe. The team provided the bank suggested modifications to its lending practices, guidance on incorporating more robust impact metrics and measurement systems, and a proposed timeline for implementation.