Embracing change

Ramón Alvarez, Director, ECLOF Dominican Republic, reflects on what is needed for an effective resource mobilisation strategy in a changing world

Since its founding in 1977, ECLOF Dominican Republic has mobilised resources for its credit programme from different sources. These have mostly been Christian-based European organisations.

The first and most important of these is the ECLOF network, which is the natural source of resources for all the national ECLOF committees (NECs). Other agencies that have provided significant financing include the Interchurch Organization for Development Cooperation (ICCO), the Protestant Association for Cooperation in Development (EZE), Catholic Relief Services (CRS), Action by Churches Together (ACT), OXFAM and Bread for the World. Contributions from these agencies have enabled ECLOF Dominican Republic to achieve the institutional and operational strength it enjoys today and we are very grateful for their contributions.

Unfortunately, these agencies have drastically reduced their operations in the Dominican Republic because the country has had one of the highest rates of economic growth in the Latin American region. However, the low-income population has not felt the effects of this growth and the Dominican Republic is one of the four poorest countries in the region.

Resource mobilisation strategy
National ECLOF committees cannot leave resource mobilisation to chance; it must be part of their strategic planning for development.

The first step is to determine the amount of resources we need to mobilise for widest impact. Then we have to identify possible sources from which to mobilise these resources. In the Dominican Republic, the main sources of 'soft' money continue to be international Christian organisations, international development agencies, embassies of friendly countries, governmental social programmes and a few local companies. Once these sources have been identified, we have to be willing to knock on their doors to get financing. We should not forget that to receive we must ask, and then try to get agencies to open their doors (and cheque books!).

In the strategy to access these sources, it helps to belong to local networks of organisations. In the case of ECLOF Dominican Republic, we also take advantage of the fact that we belong to the ECLOF international network that is well known throughout much of the world and which can serve as our reference for international agencies.

For example, in 2000 we received a significant contribution from CRS for a rural credit programme, thanks to the recommendations of ECLOF committee in Bolivia. We now enjoy a very good relationship with this agency.

Donors prefer legally registered institutions, with strong and transparent governing bodies, projects that benefit rural communities, small loan amounts, projects in areas of experience, projects with matching funds from clients, loan requests to develop areas such as new products, technical assistance and industrial improvement lending capital.

Once access to one of these sources has been achieved, it is important to maintain a long-term relationship of cooperation. This is done by complying strictly with the terms of the agreement, getting the greatest impact possible out of the projects financed and by providing professional, timely and precise reports. It is also important to say 'Thank you' for the help received. Mr Byron L. Tweeten, President of the Growth Design Corporation, says thanks should be given seven times. I think that should be 70 x 7.

Savings
Donations and the availability of soft money are declining. Therefore, NECs must begin to build defence mechanisms that will enable them to mobilise resources in the market at a competitive cost. In the future, it will be necessary to channel the savings of our poor clients in order to have the resources we need. We will have to remember that saving is the other side of microfinance services. At present, NEC are not, of course, formally regulated savings deposit institutions. However, in the Dominican Republic there are non regulated microfinance institutions that, through legal financial mechanisms, successfully use clients' money to finance credit operations.

Private & commercial funds
As another example of mobilising resources, last year ECLOF Dominican Republic received a large amount of money from a private individual toward the purchase of a new office. This was in the form of loan with renewable periods and for which the person receives the same rate of return as that paid by formal institutions.

We have also received offers from some local commercial banks to grant lines of credit. This shows that with an adequate, efficiently managed and trustworthy financial structure we can access market funding and should be prepared for such an eventuality.