Microfinance Focus, August 30, 2011: According to a study by Vision Economica, a local business research group, microcredit grew at a steady rate of 15 percent between 2007 and 2010 in Colombia. Due to microfinance, there are more than 1.2 million microenterprises operating in Colombia responsible for around 50 percent of total employment.

The National Department of Statistics testifies that microenterprises and small businesses represent 96 percent of all companies in Columbia, while medium-sized companies make up 3.6 percent and large companies 0.4 percent. Microenterprises employ an average of 2.6 people in Colombia, according to the Visión Económica report, published in July.

In Colombia, the microfinance sector complements small businesses because "they generally do not meet the requirements set by commercial banks, which do not lend money to people with limited economic resources either, due to the risk of default," Jorge Varón, the manager of the development credit fund of the Colombians Supporting Colombians (CAC) program.

The CAC lends to people of all ages and educational levels. Currently, women hold 69 percent of their loans. CAC credit fund grants loans between 28 and 14,300 dollars, at a monthly interest of 2.1 percent, with repayment periods of one month for 'emergency' loans and between three and 36 months for other kinds.

Interest rates for microloans in Colombia are regulated by national law and by decree 919, modified in 2008 to facilitate the expansion of microfinance and distinguish micro lending from consumption lending. Microcredit beneficiaries are usually clothing and shoe vendors, tailor shops, ice cream stands, bakeries, taxi, bus and truck drivers, hardware stores and food vendors.

The Visión Económica study concludes, "A positive relationship has been identified between access to financial services and poverty reduction, because (microfinance) helps people weather difficult situations that reduce the incomes of low-income populations." This is crucial for a country like Colombia where poverty affects 46 percent of the population of 46 million, according to official figures.