Microfinance Association Pulls Funds After Violent Protests

August 1, 2008

Nicaragua’s Association of Microfinanciers has announced plans to withhold $15 million in loans for small farmers due to violent protests at the offices of microfinance firms up north.

The protests turned violent last week after President Daniel Ortega encouraged indebted protesters to march on bank offices during a speech in the northern farming town of Jalapa. A special investigative police commission is looking into an incident last week in Ocotal, Nuevo Segovia, in which five officers were injured and one protester blinded after a clash between police and farmers wielding machetes, shovels, and Molotov cocktails outside a microcredit firm called Fundenuse. The protesters are disputing the terms of their debts.

Fundenuse is one of several firms that has closed its doors for more than a week since protests started, according to the Nicaraguan Association of Microfinanciers (ASOMIF).

“We express our surprise and worry regarding the declarations by the president on July 12 in Jalapa, calling for a renegotiation with microfinanciers, even though we’ve already agreed to a debt restructuring agreement with (them),” ASOMIF said in a statement.

The statement said the microfinanciers lament that Ortega “hadn’t been informed” of the agreement. ASOMIF added that its credits support some 350,000 families, and that without their small credits supporting small producers, “social instability and unemployment would be greater still.”

Nicaragua’s microfinance firms finance as much as 40 percent of the agricultural industry here.

–Blake Schmidt

 

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