NICA Fund
Randy Rice rrice@trilliuminvest.com
NICA Fund
Overview
The Nicaraguan Credit Alternatives Fund (NICA Fund) is a community development loan fund founded in 1998 by the Wisconsin Coordinating Council on Nicaragua (WCCN). The NICA Fund helps provide capital to disadvantaged persons in Nicaragua by channeling funds from socially responsible North American investors to enterprises owned and controlled by low-income Nicaraguans.
WCCN was founded in 1984 by Wisconsin citizens outraged by the US-supported war being waged on the citizens of Nicaragua. In its early years, WCCN’s activity centered on political activism, material aid, and resistance to the US embargo against Nicaragua.
Mission
Although rich in culture and intellect, Nicaragua is impoverished economically. Approximately half of the population lives in poverty and about 17% live in extreme poverty. Under such circumstances, families often rely on agriculture for their subsistence. This requires capital to buy supplies, but the disadvantaged have little or no access to commercial banks.
The mission of the NICA Fund is to provide financing for economic projects of Nicaraguan sectors with little access to commercial credit. Its lending policies are intended to support the following values and principles:
• Civic participation and locally controlled development;
• Gender equality;
• No religious, cultural, or political discrimination;
• Just labor practices; and
• Fair economic relationships between the North and the South.
Programs
The NICA fund makes loans by collaborating with its “partner agencies”, Nicaraguan nongovernmental organizations (NGOs) that specialize in providing financial services to marginalized sectors. These agencies include:
The Association of Consultants for Micro, Small and Medium Business Development which provides credit and training to low-income borrowers.
National Rural Teller is a network of rural credit unions with 10 branches throughout Nicaragua.
The Cooperativa de Servicios Multiples 20 de Abril, a multi-service cooperative in a remote region of northern Nicaragua. The main activities of the cooperative are commercialization of agricultural goods produced by co-op members, a micro-credit program, a savings program, and a co-op owned store that sells household and agricultural goods.
The Women’s Development Fund which promotes the economic empowerment of women by providing access to credit.
Investing with the NICA Fund
About 85% of the NICA fund investors are individuals; churches, local activist organizations and small foundations make up the balance. On behalf of our clients, Trillium Asset Management made its first investment with the NICA fund in 1999. Currently, TAMC manages just under $100,000 invested with the fund. TAMC makes investments with the NICA fund of at least $5,000 for a term of not less than two years. Interest is paid annually and the principal is paid in full on the day the investment reaches maturity.
The NICA Fund has an Oversight Committee comprised of a group of experts in finance and grassroots development. The Committee meets monthly to approve WCCN’s new investments in Nicaragua and to monitor existing investments.
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