Faucto Hernández

About the Entrepreneur

Name: Faucto Hernández
Location: Mayoreo, Nicaragua
Activity: Cheese Making
About the Loan
Loan Amount: $925
Loan Use: To buy cheese.
Date Listed: Nov. 8th, 2010

In the Iván Montenegro Market, Mr Faucto Hernández has stood out as a seller of dairy products such as the cheese which he sells every day in his store. His store is very busy with customers buying cheese.

He is requesting a loan to invest in the purchase of ‘queso seco’ (dry, aged cheese) and ‘queso crema’ (heavy cream similar to crème fraiche) so that he can continue offering it and so that his customers can buy it from him without difficulty. He hopes that he will receive his loan without problems and that he can thereby continue working.

Important Information About This Loan

CEPRODEL’s delinquency rate has been above historical norms recently; as of August 24h, 2010, its delinquency rate on Kiva was at 16.59%. Kiva explored this and related issues through its quarterly financial review process, during which Kiva requests financial statements from its field partners. An initial investigation has revealed that much of the cause appears to be related to the global economic downturn and its particular effect on Nicaragua. Nicaragua has been hard hit on several fronts in the last year. CEPRODEL has shared that the economic crisis reduced sales for many small businesses, and reduced overseas remittances upon which many borrowers rely for sustenance. In addition, we’ve heard reports of a sharp fall in the price of beef and pigs; also that Nicaragua was hit by a drought that further hurt agricultural production. Since CEPRODEL lends heavily in rural areas for agricultural purposes, their borrowers appear to have been especially hard hit by these factors, causing an increase in their delinquency. The organization hopes that things will start to stabilize with the new agricultural cycle in September. However, given this challenging situation, Kiva has felt it necessary to reduce CEPRODEL’s risk rating from four to two stars.

Nicaragua Context
In order to help you better understand the potential risks of lending to entrepreneurs in Nicaragua, Kiva continues to provide information on the “No Pago” movement (a movement for non-repayment of loans). The Nicaraguan government appears to have implemented a plan to resolve the uncertainties raised by the previous No Pago ‘non-repayment’ movement that has affected the country.