Expanding Inclusive Finance in Latin America: Lessons from USAID’s VPO Program in Colombia (2019–2022)
- Whitney Dubinsky
- Jun 2
- 3 min read
With the USAID Development Experience Clearinghouse (DEC) offline, the responsibility of sharing development impact stories increasingly rests with implementers and advisors. These narratives not only build institutional memory but also guide future programming. At ALD Strategic Advisory, we believe in elevating tested approaches that bridge gaps in economic access, especially for women-led enterprises.
This post highlights lessons from the Variable Payment Obligation (VPO) Program in Colombia, implemented from 2019 to 2022 with support from USAID and the Argidius Foundation. The initiative aimed to unlock finance for Small and Growing Businesses (SGBs), many of which are excluded from formal financial systems due to lack of collateral, fluctuating income, or limited financial literacy.
The Project: VPO in Colombia (2019–2022)
The VPO model introduced a medium-term loan product tied to a business’s cash flow, rather than requiring hard collateral. This flexible repayment structure was complemented by Enterprise Growth Services (EGS)—targeted business training designed to improve loan outcomes and build managerial capacity. The program worked with two financial institutions—Fundación Coomeva and Banco Agrario—to co-create and deliver this offering, with a special focus on reaching underserved entrepreneurs, including women.
What We Learned
The VPO program demonstrated that financial products designed to be accessible to women don’t automatically achieve gender-equitable outcomes without intentional delivery strategies. While many women expressed interest in the program, they often borrowed significantly less than men, even within the same sectors. This suggests deeper structural and behavioral barriers at play, including risk aversion, caregiving responsibilities, and internalized financial constraints.
Enterprise Growth Services (EGS) proved to be a vital complement, especially when offered through short, flexible digital formats. The delivery method through this project enabled women, who typically carry a disproportionate share of unpaid domestic labor, to engage with content on their own terms. Yet, uptake of EGS also depended heavily on how well financial institutions integrated their credit and training teams. Where this collaboration was intense, clients experienced a more seamless, supportive process. Significantly, training loan officers in gender-sensitive finance and cash-flow-based underwriting significantly improved client assessment and reduced rejection rates. Banco Agrario, for instance, saw the percentage of rejected loan applications drop by approximately 15 percentage points following staff training.
Key Data Outcomes (2019–2022):
A total of 33 VPO loans were disbursed: 32 by Banco Agrario and 1 by Fundación Coomeva.
Total value of loans disbursed: COP 1.45 billion (~USD 329,000).
Average loan size at Banco Agrario: COP 42 million (~USD 9,400).
Female participation: Only 28% of borrowers were women.
Average loan size for women: COP 21.3 million (~USD 4,775), less than half that of men.
Women-owned businesses borrowed loans equivalent to only 21% of their annual revenue, compared to 39% for men.
EGS content was delivered to all 33 VPO clients, with 132 hours of technical assistance and four skill-building modules focused on cash flow, sales, strategy, and risk.
These outcomes underscore the importance of combining inclusive financial products with strong institutional alignment, capacity-building, and targeted outreach to serve women entrepreneurs and other underserved business owners effectively.
Applying the Model to Central America
As the VPO model expands to El Salvador and Guatemala, these insights are critically relevant. Central America shares many of the same conditions as Colombia, including informal business ecosystems, limited access to capital, and persistent gender gaps in finance. By adapting the VPO approach to local contexts, there is enormous potential to reach women entrepreneurs and help them transition from survival-mode operations to strategic, growth-oriented enterprises. In these markets, flexible, digital-first financial literacy programs can bridge both knowledge and confidence gaps for women. Targeted outreach that addresses women’s needs directly, paired with institutional commitments to gender equity, can more effectively close the financing gap. Furthermore, financial institutions in the region may require capacity-building to transition from traditional credit models to cash-flow-based lending.
How ALD Strategic Advisory Can Help
ALD is prepared to partner with financial institutions, NGOs, and donor agencies to localize and scale gender-forward finance models. We support:
The design and delivery of financial literacy programs that resonate with women entrepreneurs
Staff training for financial institutions to improve inclusive lending practices
Development of tailored EGS modules that integrate seamlessly with local financial services
Advisory on pilot design, partnership development, and program monitoring with a gender lens
We see the future of inclusive finance not just in innovative products, but in the systems and people who deliver them.
If your organization is looking to deepen its impact in Central America through inclusive economic strategies, let’s connect.
ALD Strategic Advisory supports inclusive growth strategies for service-based and development organizations. Learn more at aldstrategicadvisory.com/service-page/initial-strategy-consultation.
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