An introduction to Kiva’s newest field partner in El Salvador.

PADECOMSM Credito has its roots in an organization that filled the public service vacuum that was created during the civil war as the guerrilla uprising pushed out the government forces.

During the twelve year civil war (1980-1992), the guerrilla’s first successful campaign was defeating the army in the state of Morazan, in the eastern part of the country. Morazan was and remains one of the poorest states in El Salvador.  The Salvadorian governments response, supported by USD7 billion from the US during the conflict, was savage. As the war raged on and off for the subsequent eleven years, there were no public institution in Morazan, for simply there was no government. There were no schools, no teachers, no hospitals, no doctors.

Within this chaos, in 1988, with the support of European aid workers and funds, seventeen community leaders of the towns near the guerrilla hotbed of Perquin, formed the Fund for the Development of the Communities of Morazan and San Miguel (PADECOMSM, its Spanish acronym). PADECOMSM main goal was to assist in the reconstruction of their homeland.

Near Perquin

In the beginning, PADECOMSM distributed medicines from the Red Cross, and also focused on increasing agricultural yields by providing farmers with fertilizer, and financing for their crops. Unsurprisingly, PADECOMSM credit program was initially very basic – their information technology consisted of notebooks and old typewriters. PADECOMSM had no technical or management training, but they did have a clear goal to develop their communities.

Having been born during chaos and a government vacuum, it was not until two years after the peace accords were signed, in 1994, that PADECOMSM finally constituted itself as a formal legal entity. In 2007, PADECOMSM created a subsidiary focused solely in microfinance called PADECOMSM Credito.

It has now expanded to five locations and a staff of 33 people. Their information technology has come so far that it is completely web-based and gives them up-to-date portfolio information. It has increased its efficiency and portfolio, yet true to its original mission, it continues to provide small size loans (as small as USD60), focuses on women, rural areas and marginalized urban areas.

It is easy to forget the essential role that field partners, like PADECOMSM Credito, have in Kiva’s mission. But without them, it is unlikely that any of us would be able to give our support to the entrepreneurs of this war torn region.

On Friday May 21st, 2010 you should be able to find PADECOMSM Credito’s field partner page and start find borrowers whom you can support.

Carlos is a Kiva Fellow working with PADECOMSM Credito in El Salvador.


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Carlos is a Portfolio Manager for Kiva's Strategic Initiatives. He is helping push the Kiva's model to go beyond micro-finance institutions to work with universities, agricultural coops, solar power distributors, fair trade companies and other types of social enterprises that can benefit from the use of credit. He covers all the regions except Africa. Born and raised among the blatant inequalities of Mexico City, Carlos graduated from Brown University with a degree focus on development. He has studied in China, Mexico and Japan. For eight years he worked in Tokyo, London and New York as derivatives trader specializing in Emerging Markets at Deutsche Bank and Citi. Carlos also worked as a Kiva Fellow in El Salvador. He is determined to push social change via market mechanisms and wants to help bridge the financing gaps faced by social enterprises.
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