Microfinance in Costa Rica: A FUDECOSUR Story

By Karl Baumgarten, KF9, Costa Rica

Time Flies. I feel like I’ve been in Costa Rica for two weeks however my no-nonsense calendar tells an altogether different story.  After nearly 12 weeks learning the ins and outs of FUDECOSUR, things are going smooth. With the Costa Rican summer in full swing, business casual has been replaced by the welcome alternative of jeans and polos. For the first time, I am experiencing the holiday season with 85-degree weather and sunshine. I have tried to start weaning myself off a healthy addiction of gallo pinto, the traditional Costa Rican breakfast of rice and beans, but with little luck. Co-workers have been promised my clothes, as I will probably need to stuff my bag with salsa lazano, the secret ingredient for making the delicious pinto.

Last week was my last with FUDECOSUR, a new pilot partner with Kiva who has managed to raise nearly $70,000 in their first few months with Kiva. Over the past year, FUDECOSUR has struggled to obtain funding as commercial lenders scaled back their lending during the liquidity crisis. Luckily, Kiva lenders are generous as ever and FUDECOSUR has been able to tap this generosity to reach more disadvantaged farmers in Southern Costa Rica. In the past, formal banks rarely reached these farmers so when business opportunities arose or emergency capital was required, profitable opportunities went unmet or productive farm assets had to be sold.  Enter FUDECOSUR.

Foundation for the Development of Southern Communities

In 1993 FUDECOSUR was established to help these farmers obtain credit to maintain and expand their farms. Most of the communities they serve are extremely isolated and the cost of reaching these clients is high. Given this, FUDECOSUR adopted a village-banking model whereby they set up and train village banks to disburse loans and collect repayments. Credit officers visit the communities at monthly meetings to oversee the disbursal process and help with any technical assistance. Check out the video below to learn more about FUDECOSUR and their clients in Southern Costa Rica.


Please consider making a loan to FUDECOSUR’s clients in Costa Rica here or join our lending team “Friends of FUDECOSUR” here.


Karl Baumgarten is a Kiva Fellow who recently finished his fellowship in Costa Rica and is readjusting to the  cold in snowy Detroit. He heads to Lima, Peru in Janurary, excited to help EDAPROSPO with all things Kiva.


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