Market System Approach in Nicaragua
Article in English below and Spanish here.
Nicaragua as the crucible of the Market Systems Approach
When Nicaraguaâs microfinance sector faced the No Pago crisis in 2008â2010, institutions across the country struggled to respond to what was a moment that could have destroyed the national microfinance sector. What emerged, however, was not just recoveryâit was a transformation in how financial inclusion was understood and practiced â a recovery rooted in solidarity.
The new podcast (below) produced by Cerise+SPTF revisits this journey through the eyes of practitioners from a variety of stakeholder groups: microfinance institutions, regional and national networks, investors, and regulators. One practitioner, Ada Eveling Rivera Colindres, Director of Fundenuse, whose organization stood at the epicenter of the challenge shared, âWe learned that growth without coordination can lead to collapse.â The different viewpoints presented throughout the video help tell the story of how the financial institutions came together through their national network to insist on repayment, while the government formed a regulatory body (CONAMI) just for the microfinance sector. In 2015, one of Cerise+SPTFâs SEPM Pros helped write the first set of guidelines for Nicaraguaâs microfinance law, basing it entirely on the structure of the first five dimensions of the Universal Standards. What has unfolded over the last ten years in terms of the partnership between Cerise+SPTF and CONAMI formed the basis for SPTFâs Market Systems Approach (MSA).
The MSA framework, now used globally to strengthen inclusive finance ecosystems, draws directly from cases like Nicaragua. It emphasizes three lessons that resonate far beyond one country:
- Balance between competition and coordination. Rapid growth requires shared norms on client protection and responsible lending.
- Local leadership and voice. Solutions that endure come from actors embedded in their own markets.
- Systemic perspective. The health of the financial sector depends on the connections among clients, financial institutions, networks, and regulatorsânot on any single playerâs strengths.
As the podcast shows, recovery in Nicaragua was not achieved by any one organization, but by collaborationâacross MFIs, associations, and regulatorsâthat rebuilt trust and stability so that the local microfinance sector, and the clients it served, could have a brighter future. For all those in our industry that seek to make finance more inclusive and resilient, especially at the national level, the lessons learned in Nicaragua remain as timely as ever.
đ Watch the podcast to see how inclusive finance in Nicaragua turned crisis into collective progress.
Join thousands of users on SPI Online
Powerful evaluation tools to turn intentions into impact.
