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Financial inclusion 26 Feb 2021

First in Latin America and second worldwide: BBVAMF still leads in contribution to development

For yet another year, the Organization for Economic Cooperation and Development (OECD) has published the data reported by nearly 40 of the largest foundations in member countries of the Development Assistance Committee (DAC), to showcase the impact of private philanthropy. For second year running, the BBVA Microfinance Foundation (BBVAMF) ranks as the leading contributor to development in Latin America, and the world’s second, next to the Bill and Melinda Gates Foundation.

The BBVA Microfinance Foundation’s institutions (MFIs) allocated a total of 1.32 billion dollars in 2019, more than any other foundation operating in the most unequal region in the world. “These results underscore our commitment to people of limited resources, whom we support with a unique microfinance model that prioritizes their progress. A model that has proven its effectiveness over the years and which in 2020 became essential to underpinning the region’s recovery efforts,” said the BBVAMF CEO Javier M. Flores.

Peru ($769 million) and Colombia ($382 million) received 88 percent of the funds allocated by the Foundation’s MFIs. The remaining funds were distributed between Dominican Republic ($143 million) and Panama ($21 million). The BBVAMF is also present in Chile, although its contribution ($288 million) is not included in this statistics, because the country has not been on the list of recipients of Official Development Assistance (ODA) since January 2018.

Private philanthropy for development, by foundation (2018-19 average, USD million, gross disbursements, 2018 prices)

According to the OECD , the 40 foundations that reported data contributed a total of 8.23 billion dollars in 2019. This figure was calculated applying the same reporting criteria followed by DAC member countries, and therefore comparable to the amount disbursed by these actors: 152.8 billion dollars.

Impact on the Sustainable Development Goals

In line with its purpose, and as noted in the OECD report, the BBVA Microfinance Foundation is committed to the fulfillment of the UN Sustainable Development Goals (SDGs). Particularly to SDG 2 ‘Zero hunger’, SDG 5 ‘Gender equality’, SDG 8 ‘Decent work and economic growth’ and SDG 11 ‘Sustainable cities and communities’, with an amplified impact through partnerships (SDG 17), that reduces inequalities (SDG 10) and impacts directly to the ultimate goal of the 2030 Agenda and the BBVAMF: end poverty (SDG 1). In addition, the work of the Foundation impacts five other Goals to varying degrees.

“Financial inclusion is more essential than ever to deliver on the goals of the 2030 Agenda,” said BBVAMF Finance Manager and Controller Gabriela Gil, who cited the detrimental impact of the pandemic on the achievement of the SDGs. As she said, the financing gap to achieve the SDGs in developing countries, which the UN estimated to be, at least, US$ 2.5 trillions per year, is now larger.

Contributing to development in times of pandemic

To better understand how leading foundations responded to the health crisis, the OECD conducted a survey with almost 70 of the largest foundations working for development in May 2020. Again, the BBVAMF ranked second place in terms of contributions to developing countries ($88 million as of April), behind the Gates Foundation.

“The digital transformation process we initiated years ago, as a priority, has allowed us to remain close to the people we support, who once again set an example of perseverance,” said Javier M. Flores. In fact, during 2020, about 20 percent of BBVAMF entrepreneurs managed to diversify their businesses and by the end of the year, around 80 percent were already fully operational.  As of year-end, over 2.6 million people had benefited from the Foundation’s work, 57 percent of whom are women.

Their effort is the greatest motivation to continue leading, for yet another year, the sustainable development of Latin America and promoting a fairer and more inclusive economic and social recovery.

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