Kiva Stories from the Field

Hangin with the boys at Lake Titicaca

Hi All!

Its been a few days since I’ve written, and much has happened! Heres the latest….

A Weekend in the Highlands

For those of you that know me, it shouldn’t surprise you that I decided to spend my day off climbing a mountain. The destination: Huyana Potosi, a towering 6000+ meter beast outside of La Paz.

I awake to a beautiful Bolivian Saturday morning, sun peaking over the valley walls and blinding me as I roll over in bed. So delighted I am to have a day for myself I nearly forget the previous night of illness- must have been some bad water or undercooked street food. I spent the night shivering in sickness, my body ridding itself of whatever it was that it decided it really didn’t like:)

Me and don Mario, a borrower

As I hop out of bed and get ready for the big day I have my doubts~ the nausea lingers and my body becons me to stay under the covers and just snuggle. But no! I’m in the Andes. I have to climb! So I drag myself downstairs, into the 4 wheeler, up the mountain with a group of Europeans, and to the base camp. 16, 700 ft. Dizzy and weak, I step out of the car, nearly topple over from nausea, and then finally surrender. So it ain’t happening.

The group heads out and I barely make it into the mountain shack before collapsing onto the couch. My body aches and I know today is not my day. I take a nap instead, and when I awake I feel a bit better and venture outside. Snowcapped peaks stare down at me, their half-melted glaciers inching forward as if they’re trying to hold to the rocky cliffs, loosing, inch by inch, their silent battle with the hot Andean sun. I sit on a rock and track the path of the other climbers with my eyes, my body pulsing with a mixture of fever and jealousy. My one day off!

I sign and accept. I guess this trip is not about climbing mountains… Big Andean Mountain: 1, Michelle: 0.

Sunday

After a long nights rest I awake Sunday morning feeling notably better. Rushing to pack, I’m down in the lobby at 7 am, awaiting my pick-up from the Regional Directors of FADES, don Edwin and don Basilio, who are to escort me to Peruvian border. The plan is to stop along the way and visit their clients, giving me a flavor for their work as I go about reading through their documentation and assessing their compadability for Kiva partnership.

FADES has certainly impressed me so far, with solid financial reporting and rigorous internal documentation and controls. But the financial statements, annual reports, powerpoint presentations and shiny banners hanging from the walls of the national office are only one side of the story. The other is the people they serve.  The borrowers in need of a little extra cash to help break the cycle of poverty. Purchase an extra machine, inventory, a cow.

As I pay the hotel bills (next stop: Puno, Peru), Edwin and Bacilo show up.  They grab my bags, I sign my bills, and soon we’re off.  Don Edwin is a delight and we soon get to talking about all subjects, their clients, his work with the organization, their goals and dreams.  As we roll through the dust of the altiplano the conversation turns to Kiva.  I explain a bit more about our model, how we work, the social orientation of our work.  We gab and gab, and at one point he turns to me and says, “I’ve dreamt about an organization like Kiva for years.”  An organization that seeks not to make money off the poor, but instead to empower them.  To balance the distribution of resources of the world.  To level the playing field just a little bit . I look back at him and smile.  I too, had dreamt about it for years.

Chatting with a loan officer

In and out of tiny highland villages, we spend the day visiting clients, driving along the shores of Lake Titicaca, and discussing Bolivian microfinance.  After visiting the Sunday market in one of the villages FADES serves, where 96% of the population lives below the poverty line, we get to talking about the possibility of Kiva financing.  If you could get cheap capital for your loans, I ask, how would you pass that along to your clients?

Easy, he responds, we’d lower their interest rates.  He explains:  Faced with pressure from funders to lower their operating costs, increase their profitability and expand their reach, in recent years FADES has had to raise the interest rates charged to borrowers of their smallest loans.  Its a classic case of their mission– to serve the poorest of Bolivia’s rural poor–clashing with the realities of administering tiny loans to borrowers in remote regions:  its expensive, its time-consuming, and its hard.

So, the result has been a 3% higher interest rate on loans under $500. We talk numbers and do a little bit of back-of-the-envelope math over lunch.   Kiva’s capital would go precisely to these borrowers. We’re a cheap source of financing, and thus demand only minimal margins.  Enough to get by and not overcharge the poor.  To empower and not enslave.  And so we birth the basis of an agreement that will ensure fairer prices charged to the poor.  An arrangement where FADES borrowers will feel the benefits of 80,000 social investors trusting them from afar, and will be able to lower their interest rates in doing so.  I leave lunch so excited to draft up an agreement I almost forget to pay!  Luckily the server is on it, and the quinoa soup and coca-cola are properly covered:)

As I set out across the border into Peru, I can’t help but think about how exciting it all is–to bridge partnerships that span continents, defy norms, challenge paradigms.  Bringing my thoughts back down to reality I strike up a conversation with my bicycle-powered open air taxi driver.  Hows business today?  How many border crossings do you do a week?  We get to chatting and he tells me about his wife and kids.  His house on the Bolivian side of the border.  He also tells me about his microloan.

Until next time….