Financiera FDL (FFDL) perfectly exemplifies the impact we strive to achieve at Alterfin.

Their innovative microfinance and Technical Assistance programmes show how protecting the planet and alleviating poverty can and must go hand in hand—it is the only way to build lasting resilience to climate change. This is exactly what our Environmental Strategy is built on and is aimed at all our partners and their beneficiaries.

Over the past 10 years, Alterfin has supported this institution through its financing as FFDL took steps to grow. Within just a few decades, FFDL has become one of Central America's largest microfinance institutions and a key reference in rural microfinancing.

This transformation highlights what we at Alterfin know so well:

Microfinance is a powerful tool for fostering financial inclusion, particularly in underserved rural areas worldwide.

FFDL has empowered individuals, particularly women (over 50% of its clients) and smallholder farmers located in rural areas (over 70% of its clients), by providing access to credit, savings, and insurance services.

However, its impact extends far beyond financial services. This institution is also deeply committed to supporting its producers through non-financial services, such as Technical Assistance, and promoting a sustainable, long-term future for the country.

In doing so, it serves as a catalyst for reducing poverty, fostering economic growth, building resilience to climate change, and empowering communities in Nicaragua by enabling entrepreneurship and supporting small businesses and agriculture.

FFDL and its Technical Assistance

Technical Assistance (TA) has been part of FFDL’s operations from the start.

Financiera FDL sprouted from a small microcredit programme launched in 1989 by the Agricultural Research and Investigation Institute of the former Central American University, UCA. Initially designed to support producers with financial resources and Technical Assistance, the programme quickly proved sustainable and successful.

Building on this success, the microcredit programme spun off to become the local development fund FDL. Supported by various international allies, like Alterfin, FDL transformed into a regulated financial company, Financiera FDL, in 2016.

This long trajectory underscores FFDL’s extensive knowledge of the producers they work with and the region's agricultural practices.

For instance, the rust plague affected thousands of coffee plantations in 2013. FDL provided Technical Assistance to 3,500 producers to reverse the effects of the plague through adequate fertilisation, shade management, and the application of fungicides in plantations.

So, by combining financial and technical assistance, FFDL demonstrates how the microfinance sector can actively contribute to building resilience to climate change and protecting the planet.

How do they create such a positive impact? Let us highlight two of their initiatives: the EcoMicro Programme and the Green Programme.

EcoMicro Programme: How FFDL is adopting climate-resilient practices and building resilience to climate change.

The programme was launched around ten years ago to help communities adapt to the impacts of climate change.

Thanks to a combination of financial and Technical Assistance, over 230 producers have adopted clean energy solutions and implemented climate-resilient practices.

The EcoMicro program has focused primarily on promoting the following practices:

• Agroforestry,
• Rainwater harvesting systems, and
• Efficient irrigation systems.

Agroforestry.

While Nicaragua’s landscape is shaped by diverse land uses, intense competition for land—driven by speculation and rentals—continues to fuel deforestation and accelerate land degradation. What’s the solution? Agroforestry offers a promising path forward.

This dynamic and sustainable approach to agriculture relies on natural processes as much as possible since it integrates woody vegetation (trees or shrubs), crops, and/or livestock within the same area.

These practices not only support the environment but also, through crop diversification, provide farmers with additional income, ultimately enhancing the livelihoods of rural communities.

By promoting agroforestry among its agricultural clients, FFDL is building resilience to climate change, protecting soil health, enhancing biodiversity, and restoring landscapes—creating a more sustainable future for its fellow Nicaraguan citizens.

Rainwater harvesting systems.

These are designed to efficiently capture, store, and distribute rainwater for agricultural use. They play a crucial role in addressing water scarcity, with their benefits extending far beyond this alone, for example:

• Energy saving since collecting rainwater requires less energy than pumping groundwater,
• Flood mitigation as it decreases surface runoff, preventing soil erosion,
• And other environmental enhancements, such as lowering the pressure on underground water supplies, allowing them to recover and replenish themselves gently.

These benefits indicate that rainwater harvesting is another key element in sustainable resource management.

Efficient irrigation systems.

FFDL goes even further. Yes, they help their agricultural clients harvest rainwater, but they also help them use this precious asset wisely and sustainably.

By introducing efficient irrigation systems, such as low-pressure or drip irrigation, they actively diminish water use while preventing soil erosion, therefore playing a determining role in building resilience to climate change for their clients.

The benefits of this programme were not only seen on the environmental level but also felt deeply within the local communities. How so?

Because by using water and land more efficiently, it:

1. Increased productivity and yields by 30% - even during droughts.
2. Enabled crop diversification and provided more varied diet options.

Together, these results have helped reduce food insecurity and allowed the local communities to become less economically vulnerable thanks to the income streams of new value chains.

Green Programme: How FFDL is preventing deforestation

Recognising Nicaragua’s significant struggle with deforestation—largely driven by livestock farming and illegal cattle ranching—our partner’s forward-looking plans offer hope.

Between 1983 and 2015, Nicaragua lost over 50% of its forest cover, while pastureland more than doubled. Much of this expansion has encroached on protected areas and indigenous territories, further endangering these vital ecosystems.

Here, FFDL’s steadfast commitment to protecting the planet once again becomes clear as their soon-to-be-launched Green Programme steps in.

The programme aims to support 1,350 producers near the Bosawás and Indio Maíz reserves—two tropical rainforest regions celebrated for their exceptional biodiversity and rich ecosystems. By promoting sustainable livestock farming practices, the initiative seeks to combat deforestation and its devastating consequences, including biodiversity loss, soil erosion, and disruption of aquatic systems.

Beyond preserving these precious ecosystems, the programme also focuses on improving productivity through sustainable agricultural methods, enabling producers to achieve greater economic benefits while safeguarding the environment.

Impressed by FFDL’s positive impact? We are too.

Financiera FDL demonstrates how, with the right support, local initiatives can ease environmental pressures and contribute to ongoing efforts to keep protecting the planet.

By supporting partners like FFDL, we help them provide their clients with tools and support to push their boundaries and create sustainable change.

Let’s make a real difference together!

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