Cooperative for American Relief Everywhere (CARE), private sector small enterprise credit program, operational program grant (OPG) 527-0317

CARE will train the National Industrial Society (SNI) to apply an innovative SME credit model in cooperation with the Banco de Credito (BC), one of Peru"s largest commercial banks. Two CARE/SNI offices will be established in target areas and CARE will work with and train SNI"s Small Business Committee to implement CARE"s streamlined credit application process and systematized follow-up methodology. A $50,000 loan guarantee fund, to be capitalized from SNI contributions, will be established within the BC, which will make loans ranging from $500 to $2,000 (local currency equivalent). The Bank will lend $10 in local currency for each $1 deposited by SNI. Borrowers will be charged the maximum legal interest rate, as well as a 3% service fee to defray CARE/SNI"s project operating expenses. It is expected that SNI will assume sole operation of the credit facilitation program by the project"s end; that many of the SME"s will join SNI, thus broadening its membership base; and that eventually the informal sector beneficiaries of the program will be able to secure loans directly from the BC.