Extending Financial Inclusion to Persons with Disabilities in Ecuador

> Posted by Annie Martyr, Associate in Fixed Income, Credit Suisse

This post is the first of a three-part series from Credit Suisse Virtual Volunteers, sharing reflections and insights from their investigations into the state of financial inclusion for persons with disabilities (PWDs) across several country contexts. The three posts will examine past efforts and offer potential solutions for creating more inclusive societies in Ecuador, India, and the Philippines. The post begins: 
When I learned about the Virtual Volunteering program at Credit Suisse, I jumped at the opportunity to learn more about microfinance, and specifically financial inclusion for individuals with disabilities. My first experience researching disability inclusion was as an intern working for a company that created software designed to teach soft skills in the workplace. I conducted research and wrote grants for a program for individuals with autism and other disabilities. I was shocked to learn about the lack of resources available to PWDs, particularly adults. The opportunity to work with the Center for Financial Inclusion at Accion seemed a perfect way to dig further into this topic. I hoped to provide much needed information on the needs of this population in the country context of Ecuador, and help further the CFI’s goal of providing access to financial services not only to the poor and needy, but to persons with disabilities, a subset of the population that has historically been marginalized and largely excluded from society.
In some ways Ecuador is ahead of other developing nations in its legal framework’s support of disability rights and in the visibility of these issues, due in part to the fact that the vice president of Ecuador is paralyzed. The victim of a shooting in 1998, Lenin Moreno was elected in 2007 as a paraplegic and has since become a public advocate for disability prevention and the protection of disabled individuals in Ecuador. In addition to having a very public advocate for disability rights, Ecuador has an established legal framework to protect the rights of PWDs and promote their inclusion in society.  I quickly found, however, that while Ecuador is further along than many other countries in terms of visibility of disability rights, the needs of individuals with disabilities are still very great, as are the obstacles they have to overcome to gain access to financial services.
After digging into Ecuador’s legal framework, my initial reaction was that the financial inclusion of individuals with disabilities as well as their general inclusion in society must be quite far along.  However, though there are bright spots, Ecuador still has a very long way to go, and simply having a legal framework does not imply that these laws are enforced. For example, though Ecuador requires that 4 percent of employees of public and private enterprises be persons with disabilities (see here for an interesting article on the topic), according to government information produced in 2010, only 35 percent of companies were compliant with the law.  Furthermore, it’s unlikely that this law even reaches most PWDs living in poverty or those seeking loans through microfinance institutions who are unemployed.
Despite these challenges, there are many organizations fighting for the rights of individuals with disabilities and working towards their inclusion. For example, an organization called Taxi Soldario, operating in Quito, is designed specifically to make the city more accessible and help transport individuals with disabilities. In terms of financial services, CONADIS (the central government disability organization) provides mechanisms through which PWDs with small businesses or micro-enterprises can obtain preferential loans. Additionally, many of CONADIS’ member disability organizations in Ecuador provide support and business training for PWDs. For example, the National Federation of the Blind in Ecuador (FENCE) provides education for the deaf, with courses on executive leadership, computing, and small business administration. Another organization doing fantastic work around financial services for individuals with disabilities is Banco D-MIRO, a private foundation that became a bank in 2011.  D-MIRO has a program called “Producto Creer” (“Product Believe”), which offers financial services specifically to PWDs, and is one of the few (if not the only) MFIs in Ecuador to offer a product like this.
I spoke with Knut Dobbe, former Director of Social Responsibility at D-MIRO, and Carlos Rabascall, Head of Marketing and Strategic Communication, about the services offered, challenges faced, and why providing financial services for persons with disabilities has been a good investment for the bank. It was clear that the organization is resource constrained, a hurdle that is no doubt a factor at many other microfinance institutions around the country. When asked how they reach individuals with disabilities, Dobbe noted that while they had planned to aggressively market the program, they hadn’t pushed forward with such efforts because the bank didn’t have capacity. Keep in mind that marketing can include even the simplest measures, such as creating flyers.  Instead, loan officers rely primarily on word of mouth and speaking directly to PWDs, which has proved relatively effective given that persons with disabilities proactively come to Banco D-MIRO seeking loans.
What types of services are available through the program? D-MIRO has found that the most popular products are loans, followed by savings and insurance, with savings accounts being only recent product additions. (When I spoke with Dobbe in June, they had opened the first savings account seven weeks before.) D-MIRO offers multiple insurance products, including free health insurance, through which clients can go to certain medical clinics and receive a free check-up. Through this program D-MIRO has provided over 30,000 medical exams! Though the work Banco D-MIRO is doing to better society and improve lives is reason enough to support a program like Producto Creer, a concrete financial incentive for extending financial products to PWDs also exists. Banco D-MIRO has found that individuals with disabilities, on average, are more reliable borrowers. In fact, while the general loan portfolio at Banco D-MIRO has a delinquency rate of 2.1 percent, Producto Creer’s clients have a lower rate of 1.1 percent.
In the end the greatest challenge, notes Rabascall, is societal inclusion. One of the most important goals of D-MIRO’s program is to empower persons with disabilities in Ecuador and ensure they understand their rights. It’s clear that Banco D-MIRO and other government organizations are moving in the right direction in promoting these goals, but there is still much to be done in order to make the financial services industry and society generally more inclusive for persons with disabilities in Ecuador.
For more information on these and other projects, visit the CFI website’s section on financial inclusion for persons with disabilities.
Annie Martyr is an Associate in Fixed Income at Credit Suisse.
Image Credit: Federaciones Nacionales de y para la Discapacidad del Ecuador
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