In 2002, Edge Finance, a consulting firm, began designing pilot projects in Peru (Proyecto de Desarrollo Corredor Puno –Cusco and Proyecto de Desarrollo Sierra Sur) as part of a program sponsored by the International Fund for Agricultural Development (IFAD) to stimulate formal financial savings among poor indigenous women. Based on these successful experiences, Edge Finance presented a concept paper to the Ford Foundation for a project called “C4-Proyecto Capital,” proposing to link programs that would include people in the financial system with social protection programs, especially Conditional Cash Transfers (CCT).*
In late 2007, the Ford Foundation and Edge Finance presented the Proyecto Capital concept paper to governments of Latin American countries, many of which expressed great interest. To launch the project, the Instituto de Estudios Peruanos (www.iep.org.pe) (IEP), a private organization dedicated to research, teaching and dissemination of social studies about Peru and other Latin American countries, joined forces with Edge Finance and the Ford Foundation in 2008.
The knowledge Edge Finance had acquired about inclusion in the financial system was leveraged in 2009 with the creation of Fundación Capital (www.fundacioncapital.org), a non-profit regional organization dedicated to promoting the generation and accumulation of assets among low-income, marginalized and vulnerable people in Latin America and the Caribbean. Also in 2009, because of their existing relationships and collaborative experience, the Instituto de Estudios Peruanos (www.iep.org.pe) and Fundación Capital signed a framework collaboration agreement to develop Proyecto Capital.
The two organizations currently co-manage the project. While Fundación Capital concentrates on the design, implementation and expansion of pilot projects in the countries where the project operates, the Instituto de Estudios Peruanos focuses on research and, especially, on evaluation of the outcomes and impact of the pilots that are under way.
* A conditional cash transfer program is a social protection program that delivers a cash subsidy to representatives (usually women) of families that have been identified, through a targeting process, as having serious economic disadvantages. Delivery of the cash transfer is subject to the families’ compliance with certain requirements (hence “conditional”), which generally include sending their children to school regularly and taking them for periodic health checkups, as well as prenatal checkups for pregnant women. Seventeen countries in Latin America and the Caribbean have one or more CCT programs benefiting some 27 million families, for a total of 111 million people, equivalent to approximately 21 percent of the region’s population.