Financial Cooperative Fueling Local Entrepreneurship and Community Growth in Medellín

Queen Máxima at CFA in Medellín
UNSGSA Queen Máxima learns about the small bedding and textile manufacturing business from owners Alexander Maji, and his wife Diana Cristina, during a field visit in Medellín, Colombia, on 26 February 2024. Photo: Patrick van Katwijk

The Cooperativa Financiera de Antioquia (CFA) is helping to lead the charge in empowering rural Colombian communities by offering crucial services like financial education, business development, and cooperative training in 37 municipalities. The impact of CFA's work was highlighted during Queen Máxima's visit on 26 February 2024, where the Special Advocate saw firsthand the success of local entrepreneurs like Alexander Maji. His journey showcases the power of targeted financial aid to revitalize local businesses and unite communities.

Alexander, who runs a small bedding and textile manufacturing business with his wife, Diana Cristina, faced significant challenges in the wake of the pandemic. Originating from Cali, he resettled in Medellín and launched his business prior to the global crisis caused by COVID-19. The venture came to a standstill as the pandemic surged, putting his and his family's dreams at risk. Born to Ecuadorian migrant parents in the textile trade, Alexander's business aspirations are deeply connected to his heritage.

A turning point came when Alexander connected with CFA in 2021 through the Quichua Indigenous Town Council in Medellín. Lacking a consistent credit history, he was nevertheless entrusted with a first loan of 30 million COP (approximately USD $7,600), followed by a second of 60 million COP (approximately USD $15,200). This trust was not misplaced; the loans allowed him to renovate his workshop, purchase equipment including sewing machines, and expand sales through local wholesale markets . He secured the loans without interest for the first year through a partnership between the Medellín Municipal Administration and the Indigenous Council, to which he and his wife are members.

With CFA's backing, Alexander's business has grown to an eight-member team, securing a robust presence in Medellín's "El Hueco" commercial center and establishing a loyal customer base.

This growth trajectory embodies the transformative power of CFA's targeted loans and underscores Alexander's drive to further expand its operations, said Jorge Corrales, CFA General Manager. "Alexander shows us how CFA’s approach—building strong community networks that help each other out, connecting buyers and sellers, and providing educational programs—can open doors for a lot of people that big banks usually ignore," he added.

CFA offer a diverse set of financial products and services, encapsulating a broader vision for financial health and improved livelihoods. Through microloans, CFA fuels the ambitions of entrepreneurs, while its savings accounts tailored for rural savers provide security and growth potential for individuals in remote regions. Insurance products reach out to low-income families, affording them protection and peace of mind from potential shocks. Furthermore, the CFA Movil App revolutionizes access digitally, enabling cardless cash withdrawals and ensuring that even those in the farthest reaches can participate in the economy.

CFA's initiatives resonate deeply in Colombia, where cooperatives are critical to supporting the nation's economic vitality. Despite holding a modest market share compared to banks, financial activities are on the rise, encouraging a more integrated and technologically advanced cooperative sector. Moving forward, cooperatives are looking to work more closely with Colombia’s public development banks to expand access to finance efforts.

Alexander's growth from a budding entrepreneur to a thriving business owner underscores the importance of inclusive financing for fostering economic growth in Colombia. His story shows how strategic support can lift up individuals, helping them overcome challenges and strengthen their financial stability and financial health. Looking ahead, Alex and Diana will focus on incorporating digital tools into their business, including online platforms to help manage sales, inventory, and payments.