Adaptation and digitization as responses to the effects of the pandemic

April 20, 2021

Interview with Edgardo Pérez, General Manager of Fundación Génesis Empresarial (Génesis), in Guatemala

In Guatemala, micro, small and medium-sized enterprises (MSMEs) make up 85 percent of jobs and generate approximately one-third of the country's GDP.  However, these segments are often underserved by the traditional banking sector.

In the strongest industries - agriculture and commerce - high informality translates into significantly lower wages, mainly in rural areas. In addition, only 44 percent of adults in Guatemala have a bank account and more than half of the inhabitants live in poverty. This is affecting the most vulnerable populations, such as indigenous groups and women, further widening inequality gaps.

Microfinance institutions, as a channel to provide credit to this neglected population, are key to achieving financial inclusion and supporting Guatemala's economic growth.  

Génesis was created in 1988 as a non-profit organization. Its business model is driven by a strong social and developmental mission.

After a year of restrictions imposed by COVID-19, we interviewed Edgardo Perez, General Manager of Génesis, who tells us how they have dealt with the effects of the pandemic, and their commitment to support and maintain their clients.

Edgardo Pérez, General Manager of Génesis. Photo: Courtesy of Fundación Génesis Empresarial

1. How has the COVID-19 pandemic impacted Fundación Génesis Empresarial?

We have to take into account that, in addition to the pandemic, Guatemala was affected by two hurricanes, Eta and Iota, which generated a double impact, since many of our clients work in sectors such as agriculture, which were very hard hit by the disasters.

From another aspect, there was also a positive impact: digital tools became very important and we learned to deploy them more efficiently, both internally and in the financial services we offer.

I can also say with certainty that the pandemic made our institution truly client focused.   Every month, we reached out to 100 percent of our clients to find out how they were doing and how we could support them.

2. What are the biggest challenges your clients are experiencing in the face of the pandemic? How is Génesis supporting them in addressing these challenges?

We work mainly with MSMEs, in various sectors - from hotels to restaurants, hardware stores, neighborhood stores, study centers, farmers, among others.    Like many, some of them had cash flow problems and the vast majority suffered the closure of operations due to the standstill of commerce.    Their biggest challenge was to rethink their way of operating to continue surviving, and I believe that at Fundación Génesis we knew how to respond in a timely manner and support them.

The first thing we did was a segmentation by industry, to better understand the challenges faced by each one.  We proposed financial and non-financial solutions, customizing the products, and offering them training in this regard.   This led them to see their relationship with Génesis as one of benefit and not of detriment.

Fundación Génesis Empresarial offers training to women clients in various topics and helps them strengthen their skills as entrepreneurs. Photo: Courtesy of Fundación Génesis Empresarial

3. Most of your clients are women. What is the difference in the business model for this segment?

Supporting women has been at the core of Génesis throughout its history; they represent 62 percent of our clients.   The business model is aimed at providing them with financial and non-financial products that help them to prosper in their businesses, to feel empowered and to give them a different sense of life.  We offer them training on nutrition, reproductive health, hygiene, leadership, dignity, among others. We help them strengthen their capacities as entrepreneurs and we have really proven that women are extremely responsible in the way they run their businesses, the way they use their money and how they take care of their businesses.

4. What do you consider to be the main lessons and experiences learned after the COVID-19 pandemic for the financial sector? What is the future focus of the business?

The first and most important lesson for me is that the financial sector must approach the MSME segment as a source of working capital to improve people's quality of life. At Genesis, we do not give "credit", but rather we offer comprehensive support formulas for the development of families.  This is the vision that makes us different and probably one of the reasons why we closed 2020 on a positive note.

We also confirmed the importance of going deeper into the educational aspect, of explaining what the products are and how they can invest to impact them positively.

We have proven that we can be extremely agile and adaptable in the dynamic creation of products, policies, processes and, above all, technological innovation. We want to continue the sophistication of our digital products.

Today, we can already originate credit online, make payments, transfers, and even create a network within your community for these transactions. We aim to bring this technology to rural communities and women.

5. How do you think IFC's alliance with Génesis has contributed to fostering financial inclusion in Guatemala?

IFC is not only a financial partner for Génesis, but it also became a window to learn about the best international practices and to interact with players in the sector worldwide. As a result of trainings offered at the beginning of the pandemic, the initiative of segmentation by type of client arose, which we implemented to address specific needs. We are now learning about new products and practices that IFC is promoting around the world to foster women's business development.

IFC and Génesis share the importance of generating an impact on development.  When offering solutions, we value our clients' "Ruta de Desarrollo" (Development Pathway), a unique methodology that measures the quantitative and qualitative evolution of clients, with the main objective of pulling them out of poverty. If a product does not generate an impact on development, we do not launch it.

Published in May 2021