Archive for March, 2009
First Quarter 2009 Review
The first quarter of 2009 has seen many amazing stories from Kiva Fellows in the field. Let’s take a look back at some of the remarkable blog posts you may have missed!
Top 5 most viewed blog entries:
With almost 6000 views, Kieran Ball takes the internet community by storm with his post featuring a phenomenal video tracking a loan from London to Cambodia. You can also view the translated Spanish and French versions of the video here: Un Punado de Dolares/ Une Poignee de Dollars.
- Fistful of Dollars: The Story of a Kiva.org Loan by Kieran Ball (Cambodia-Indonesia)
- Kiva Fellows: News from Cambodia by Kieran Ball (Cambodia-Indonesia)
- Microfinance in the Air by Nicholas Roose (Indonesia)
- Used Clothing Sales in Northern Mexico by Megan McTiernan (Mexico)
- Bluefields, Nicaragua by Megan Montgomery (Nicaragua)
It has been an exciting first quarter as a new group of Kiva Fellows left for the field, some existing fellows transitioned to new placements and others returned home after a life changing experience abroad. The theme of this Kiva Fellows blog review is transition.
Kristy and Andrea shared about beginnings of their fellowship in Cameroon and Guatemala. As you may know, Kiva Fellows commit to 10-12 weeks to their placement, but some commit to be a Kiva Fellow for 6-12 months and have multiple MFI placements. Rob discussed his transition from Tajikistan to the Philippines. While Kieran, John, and Teresa survived a lightening strike on their airplane from Cambodia to the Philippines as well as a feisty raccoon (#2 blog). Julie has been a Kiva Fellow for over ten months and wrote a winsome reflection about her “fellow fellows”. Recently, Cory posted an email conversation thread between active Kiva Fellows with their candid insights into microfinance. Our first Kiva Fellow in Benin, Sarah Lawson, shared some closing thoughts on her fellowship.
Along with transitions we have seen lots of great video content including video journals and borrower profiles. Below is a list of some video blog entries:
- Nathan and Bernice showed us how to walk through a rice farm
- Stephanie’s thoughts on microfinance interest rates from the back of a motorcycle
- Liz shared a clip from a monthly group meeting in Senegal
- Emily asks “are you my entrepreneur” in Peru
- Jessica explains a “solidarity group” in Mali
- Maya shows a MFI branch office in Nicaragua
- Bernice conducted training in Vietnam
- Sam revealed the celebration after the presidential election in El Salvador
- Sierra and Diana each summarized a day of visiting borrowers
That brings us to the end of our first Kiva Fellows blog summary for Q1 2009. The content that Kiva Fellows have provided for the blog is impressive, so we decided to highlight a few of the pieces from the last three months.
Did you enjoy this blog summary? Please vote in the survey below:
31 March 2009 at 15:53 Zack Turner, KFP Coordinator 1 comment
Another Way Microfinance is Changing the World
Imagine that you’re a young West African woman. You live in a small village, and you had to quit school at a young age to help your parents take care of your brothers and sisters, so employment prospects are slim.
Your grandmother approaches you with a job offer. She tells you that, with the career that she has in mind, you could make up to $200 a day, along with gifts of palm oil, yams, and chickens. You would be carrying on a family tradition, a religious tradition, and a cultural tradition, and the people in your town would respect you and your work.
Sounds good, right?
So, it’s no wonder that many African women still take up work in the practice of female genital mutilation, despite the fact that it is illegal in many countries.
According to the World Health Organization:
- Female genital mutilation (FGM) includes procedures that intentionally alter or injure female genital organs for non-medical reasons.
- An estimated 100 to 140 million girls and women worldwide are currently living with the consequences of FGM.
- In Africa, about three million girls are at risk for FGM annually.
- The procedure has no health benefits for girls and women.
- Procedures can cause severe bleeding and problems urinating, and later, potential childbirth complications and newborn deaths.
Senegalese babies in a rural village. FGM procedures are mostly carried out on young girls sometime between infancy and age 15, and occasionally on adult women. (Photo courtesy of Liz O'Donnell, KF7)
Many women who work as “excisors” are unaware of the medical complications caused by FGM. Furthermore, the tradition of FGM is often believed to be a part of Islam, but actually has no religious basis. Often, once the excisors learn the truth about FGM, they decide to change their careers.
Ouraye Sall, from Senegal, is one of these women. “Ten years ago I could never have imagined that I would be a leader in a movement to end the ‘tradition’ that most women in my community have undergone. Not only did I believe it was a religious obligation, but I myself was the one who operated on girls in all the surrounding communities.” Oureye is now an advocate for ending FGM in Senegal. “Ever since I learned that FGM is not required by Islam and that it is a violation of girls’ and women’s rights, I stopped practicing.”(1)
But, what options do these former excisors have, once they decide to renounce their lucrative careers?
Here’s where microfinance comes in! There is a growing movement to link anti-FGM health education campaigns with microlending programs that help provide alternative income-generating activities for former excisors. These women receive microloans to start new businesses, and agree to attend informational sessions on the dangers of FGM.
According to the advisor of one of these programs in Togo, the former excisors are not the only ones to receive the FGM-linked microloans. She says, “if you attack the supply of practitioners, but you don’t reduce the demand, then FGM will continue. Only some of the women who get loans are cutters. The others live nearby. We must work with the entire community.”(2)
In Gambia, a tiny sliver of a country situated on the West African coast, the Gambia Committee on Traditional Practices affecting the health of women and children offered $200 microloans to 19 former excisors last year in a public ceremony as a part of the Alternative Employment Opportunities Project. The recipients vowed to discontinue their former work and to help protect female children from FGM. The loans were followed by training on microfinance and management of small scale business enterprises. The women planned to use the money to enter into a variety of income-generating activities, including animal rearing, petty trading, and pottery.(3)
While microloans provide an alternative for the former excisors, it is up to the women themselves to make the difficult decision to renounce their former careers, and to stick with their decisions. According to the president of the Benin-based Women in Law and Development in Africa, “I cannot tell you how many public declaration ceremonies we have had with women swearing ‘never again’. When we do follow up, we find they are back at it.”(4)
As the saying goes, “you can lead a horse to water, but you can’t make him drink.” And it becomes even more complicated if the water is a microloan with 20% annual interest. And if the horse has to work in the hot sun selling peanuts for 5 cents a bag in order to pay back the water/microloan.
Nonetheless, the rate of FGM is declining, and microfinance provides a key component that enables the change.
Just one more way microfinance is changing the world.
***
(1) “Ending female genital mutilation and cutting in Senegal.” UNICEF.
(2) “Can microcredit turn FGM/C cutters to new trades?” IRIN.
(3) “D100,000 Award For Female Circumcisers.” FOROYAA.
(4) “Can microcredit turn FGM/C cutters to new trades?” IRIN.
***
I am a Kiva Fellow, Class of KF6/7, serving three months in Lome, Togo, and three more in Thies, Senegal. Please check out my current MFI, IMCEC, and see all of their fundraising loans here!
Discussion on Microfinance
After about 6 weeks being out in the field and working with my MFI, I sent the following email to the 7th class kiva fellows:
I have a burning question I’d like to ask all of you: now that you’ve been working with your respective mfi’s for some time now, what do you think about microfinance (in general)? Any good surprises? Any bad surprises?
What followed was a long, fascinating discussion that we thought would be a good idea to publish here. I’ve posted the replies as comments to this post. Hope you enjoy!
“From One War to Another”
**Warning: Do not read if you are my parents**
Yesterday morning the secretary of FAPE (the MFI I am working with here in Guatemala City) woke up at 4:30am. As she left her house she kissed her 3-year-old son goodbye and told him that if she didn’t come home tonight he should know that she loves him. She then waited at the bus stop for over 2 hours for a city bus to bring her the 5 miles to the FAPE office.
Guatemala City (“Guate”) is in a public transportation crisis. It’s taken me awhile to understand the situation and it’s still rather complicated, but I’ll do my best to explain what I do know. It all starts with Guate’s large gang problem. One of the ways that the many gangs terrorize the city is by demanding payments from the bus companies. It’s a Hollywood style “meet me every Wednesday at the gas station to pay $100 — or else” kind of deal. If the companies don’t pay, the gangs kill bus drivers at random. They drive by on a motorcycle and fire into the drivers seat. They get on the bus as a passenger and shoot the driver point blank. They follow the bus until the driver stops for a snack and then take him out with one bullet. It’s horrific. In March alone, over 30 bus drivers have been murdered in Guatemala City.
A few Outer City Busses
Aside from being terrifying for the residents of the city, it also heavily affects their day-to-day life. The vast majority of bus drivers in the city have gone on strike (wouldn’t you??) which leaves eerily bus-less streets and hundreds of thousands of people stranded with no way to get to work or school. Guate has no other public transportation system and taxis are too expensive for the majority of the city’s inhabitants. So what do they do?
Well, like FAPE’s secretary, they get up 2 hours earlier and anticipate getting home 2 hours later. They hold their breath, praying that no harm will come to them on the ridiculously overly crowded busses. It may sound dramatic to tell your 3-year-old that if anything happens to you on your way to work that you will always love him, but the fear is real. Can you imagine being scared for your life every time you get on a public bus to go to work or to school?
The older generations, those who lived through Guatemala’s 30-year civil war tend to sigh and say this is just a new kind of war. They saw an era when the military and the police were the ones doing the killing, so seeing them simply stand aside while all of this goes on doesn’t appear to surprise anyone.
The place formerly known as my morning bus stop
What about me? Well, thankfully I can report that I am being extremely well taken care of. FAPE sends me to and from work in a private taxi and accompanies me anytime I venture beyond the large front gate of the office. I actually feel quite safe in my daily routine. I admit that I get small pangs of jealousy when I read about other Kiva Fellows seemingly independent bus trips and client visits, but for now I head “home” every day thankful for the luxury of feeling safe on my daily commute – a luxury that is simply not afforded to many people in this city.
____________________________________________________
See actively financing loans at Kiva.org!!
Kiva Fellows IN the Field – Part 1
According to the author of Outliers, Malcolm Gladwell, Asians are typically better at math because rice farming is so much more labor and time intensive than all other forms of agriculture. While we don’t necessarily agree with the math side of his argument, we agree with the difficulty of rice farming.
Many of the Vietnamese Kiva borrowers are themselves rice farmers. In order to appreciate and gain a sense of what the life of a Vietnamese Kiva borrower is like, we, the two Kiva Fellows in Vietnam, took the opportunity to spend a day in a typical borrower’s shoes, or lack thereof.
The rice paddy in the distance is calling out our names...
After spending two hours literally in the field bending over in the baking sun and in ankle deep mud and water, we realized that we had not become experts in rice farming techniques. To make this point clear, we couldn’t even tell the difference between the weeds we were supposedly looking for and the actual rice; the grass had evolved to look almost exactly like the rice! This is just one of the difficulties that the farmers face everyday in the field. (We haven’t even mentioned the exact science of fertilizing and watering let alone the creepy crawlies everywhere)
For us, we could barely comprehend the effort it takes for the farmers to simply put rice on their own tables, let alone the fact that the borrowers have other job duties as well. To supplement their own income, many of the farmers take up Kiva loans to run micro-enterprises such as selling fruit and vegetables at market or raising and selling animals. Simply put, being a Vietnamese farmer isn’t as clean-cut as one may think, and we found this out the hard way…
Bernice and Nate, Kiva Fellows IN the Field
Please continue on to Kiva Fellows IN the Field – Part 2
Anatomy of “The Field” – Chacos & Cuddling Piglets
For many NGO’s and even corporate offices, “the field” refers to branch offices and client meetings held outside of company headquarters. “Going into the field” is a very commonly used phrase on the Kiva Fellows blog. This broad definition applies to the work of Kiva Fellows as well, but we get to say we are “off to the field” with extra pizazz because, well – we literally go to the fields.
Step into my office...
(You should not be expecting anything profound from this blog post…after all, cuddling piglets is in the title!)
Field Equipment - Don't leave home without:
- Small Backpack
- Flip Video Camera
- Motorcycle Helmet
- Digital Camera
- Notebook & Pen
- Toilet Paper in Ziploc Bag (Might save your life!)
- Purell
- Water
- Sunscreen
- GPS device
Chaco tan/dirt lines - the Kiva Fellow tattoo
In Cambodia, most houses in “the field” are built on stilts to create a shady space underneath which the families go about their daily activities, often times sharing the space with their cows, pigs, and chickens who are also trying to escape the 100+ heat. Most of my interviews with Kiva entrepreneurs take place on a wooden bench in the “shade.”
Hangin' under the house
It is easy to romanticize “the field.” I’m not going to lie; I feel pretty bad-ass flying through the Cambodian countryside on a motorcycle with my Camelbak full of equipment. I believe strongly in the work that I am doing with Kiva and AMK, and the field is where all the action takes place. After spending 5 straight days in the field this week, however, I can assure there is a flip side to the romanticized version. The heat is excruciating, I sweat more than I thought is humanly possible, I get filthy dirty, riding on the back of a moto for more than 20 minutes on bumpy dirt roads leaves me more saddle sore than any horse could, and the local food, despite being delicious, can send me running for a toilet, if I am lucky enough to find one. “The Field” does not operate on a clock, and microfinance is a very social construct in Cambodia, particularly when it comes to village bank loans. This is my polite way of saying that there is a lot of “down time” in “the field,” so I am learning to check my notions of efficiency at the door each day. “The Field” is an amazing experience and well worth the uncomfortable side effects. Occasionally I see some amusing things and just happen to have a video camera in my hand. Here are a few random out-take clips from the field. Check out the spooning piglets – gotta love it!
Healthy Loans
Neat pajamas. That was one of two things I got out of having Amoebic Dysentery last week. The other, was a new appreciation for the work that K-MET, the development corporation with a small micro-finance wing, is doing.
Bad Food. Neat Pajamas.
I had been in Kisumu, Kenya for nearly three weeks and was really starting to hit my stride when the stomach rumble that is all too familiar to my fellow fellows rudely interrupted me. I’ll leave out the nasty parts but within 5-hours I went from bold Kiva Fellow to helpless, dehydrated man-baby. I called Milena Arciszewski (KF6, saint) and she helped me to the hospital where I managed to not cry myself to sleep and the doctors decided to check me in.
After a few IVs full of industrial strength Chinese anti-biotics and 80 gagillion trips to the bathroom, I was beginning to feel a little better and ventured out to the hospital’s balcony. Looking and acting like an extra from the latest Wes Anderson flick (cool pajamas, bandages, self-pity), I watched the sun set over a nearby slum.
It was at this moment the disparity in Kenya’s health-care system hit me. The treatment I received at Aga Khan Hospital was some of the best I have received in the world, but it was unfortunately due to the fact that most of the doctors and nurses had few other patients to tend to. The bulk of Kisumu’s population, including those suffering from the same parasite I had, cannot afford to check in or even visit a properly functioning hospital.
As I looked out at the slum, I thought of the other people who drank the same water or ate the same bad meat who were battling the same issue. What was going to become a battle/travel story for me was going to quite possibly kill someone within a kilometer of the hospital.
So where do micro-loans come in? I coincidentally am in a position to know. K-MET, where I have been placed for my Kiva fellowship, is not a traditional MFI. Rather, it is a development corporation focused on improving the health standards in Western Kenya. What is unique, is that K-MET uses the bulk of its micro-finance program as an incentive for Community Based Health Workers to dedicate more time to their work. Why the incentive? Because there are really incredible (mostly) women who work and live in the slums here in Kisumu (as well as outlying rural areas) who, on top of raising and supporting their families, running their business and managing some of the more difficult aspects of living in an underdeveloped town, VOLUNTEER to do community based health work. This often means taking on extra costs like delivering meds to patients to sick to get to the hospital or transporting health workers to patients homes. Often, these women are the lifeline for chronically sick and weak patients. Micro-loans often feel like the least that can be done for these women.
Really Neat Women
The program is also great because these women are trained to educate their families, friends, neighbors and communities about nutrition, hygiene, safe-sex and birth control while others are actual nurses who provide limited medical care. What makes the whole thing more remarkable to me, is that many of these women live on barely a dollar a day, a fair amount are widows and they live in conditions that are extremely difficult.
The services provided by these community based health workers pales in comparison to the treatment I received at the hospital, but without them, there would be nothing for their patients. I knew before I arrived that the work these women did was important, but until I went through the desperation that comes with debilitation, I’m not sure I fully understood how important it is to support these women in their work. It has given me, and I hope in turn, Kiva Lenders to K-MET, a new sense of purpose.
To lend to K-MET, check out the K-MET Team set up today!
Is the interest rate too high? My perspective from the back of a motorcycle.
To understand the interest rate that Pearl Microfinance charges its clients takes more than a brief look at a few numbers.
If you ask someone at Pearl what the interest rate is on Pearl loans, they will tell you “2.5%.” This means that there is a 2.5% per month interest rate. 2.5% interest is charged on the original loan amount rather than the balance remaining – in technical terms this is a flat interest rate rather than a declining interest rate. With a flat interest rate, over in a year, the clients would be charged 30% of the original loan size, and with the declining balance interest rate, they would be charged 16.25% of the original loan size.
These seem like very high numbers, but since the vast majority of the loans that are posted to Kiva’s website have 3 or 4 month loan terms the total interest paid ends up only being between 7.5% and 10%. To me, after a long motorcycle ride last Monday, this seems reasonable.
The Borrowers gather to receive their loans.
On Monday I went to visit the borrowers of Mityana, Uganda. Mityana is a mid-sized town that is about 50 km west of Kampala.
A few minutes after reaching the office, the credit office (CO) who was to take me to the field that day roared up on his motorcycle and came rushing in, very apologetic for not being there to greet me when I arrived. After welcoming me, greeting me, asking after my family, and all the people in Kampala, the CO asked me, “Are you really coming with me to visit the group today?”
This should have been a warning signal of what was to come, but since many Ugandans fear that I will not be able to manage things like carrying my own bag I tend to insist that I can do whatever people are asking of me (yes, this does result in me trying to do things that I definitely can not do – like chop an onion with a dull knife while holding the onion in the palm of your hand, but who can do that?!?).
The CO insisted that we take lunch before going because the place we were going was “very far!” So we took lunch and then sat around in the office waiting for the executive members of the group we were to visit to finish getting the money from the bank. At PEARL, the executive members of the community banking groups are responsible for carrying the cash to and from the groups. While we sat around, I played with the youngest member of the office, the 3 month-old baby of the office assistant.
About 45 minutes later, the CO started preparing me for the journey. He insisted that I wear a huge raincoat that he must borrowed from a local muscle-builder – and a helmet that looked as if it had been through a few crashes. I got on the back his motorcycle, and we set off.
After about 10 minutes on the road, the CO pulled over and asked me if I would sit “like a man.” I was sitting side saddle since I was wearing a long (cream colored) linen skirt, but I feared that he was asking me to sit “like a man” for my safety, so I swallowed my pride, hiked up my skirt, and tried to find a way to throw my leg over the side without traumatizing the children who had gathered to observe the scene.
A view from the road early on.
Usually before getting on the back of any motorcycle I tell the driver – “Mpola mpola – kale?” Which roughly translates into, “Go slowly, ok?” This usually has the effect of making my driver practically fall over since almost no white people who live in Uganda take the time to learn even a few words of Lugandan, but more importantly – it usually does makes the driver go slowly. Since the CO was a co-worker, I did not feel that I could tell him to go slowly – and he did not.
For the next hour, we traveled up and down hills that were at about 45 degree slopes on roads that were not only unpaved but seems to be covered with about 4 inches of dust. There were a few brief periods where I did not fear for my life. Eventually the road flattened out, which meant, much to my dismay, that the CO increased his speed.
Then we came upon the “road repair”…
The “road repair” was an area where HUGE piles of sand, that I am assuming were going to be flattened later, had been dumped in the middle of the road at about 8 foot intervals. The piles were about 6 feet high (I could not see over them), and they spanned the entire width of the road, except about 1 foot on one side – and the side where there was small passable area was not always the same side, which meant that was virtually impossible to continue down the road. The CO tried to drive his bike very slowly, often having to put his feet down and push off the side of the heaps of sand.
We kept almost falling over but the CO seemed unconcerned. I was very concerned.
When my skirt ripped, I was even more concerned, and when the back wheel skidded out beneath me, I got off – that is the graceful way of explaining how I ended up off – and started walking.
We eventually did reach the group (the Lubajja Traders), and it was wonderful. The interviews were fantastic, and the scenery was stunning. There was a school next to where we were meeting was having music class so they were singing and dancing around. This combined with the sight of the lake near by, and smell of the tropical greenery almost made me forget that I would have to make a return journey similar to my first experience…
On the way back to town, the CO seemed to be driving even more recklessly. After almost completely wiping out a few times, we came upon a large obstacle, and I told the CO to stop so that I could walk around it, and he drove off eventually going out of sight…
I wondered if he had misunderstood me. Maybe he thought that I had had enough, and that I thought I could just walk the rest of the way. There was a truck up ahead, maybe he thought I would just try to hitch a ride with the truck. I wondered what exactly I would do if he had left me here to find my own way… I was hours away from town by foot and there was no way I would make it before it was dark.
So… I just kept walking, hoping that he would come back… I walked trying to hold the tear in my, now filthy, skirt closed, with a huge helmet squeaking on my head, sweat soaking through my shirt under my oversized rain coat, and limping slightly since my sandal had broken and cut my foot one the times that we had fallen. From under my helmet, I could still hear the children’s voices calling out, “Bye Mzungu!” and although I knew it would make me look even more crazy – I couldn’t help it – I started laughing out loud. I could not stop laughing. I kept thinking what a funny picture I must have made. I am sure that the story of the Mzungu who thought she needed to wear a helmet to walk in Uganda will be told for weeks.
Then and there I decided that, had there been a way to make a video of that day without killing myself, I would have made the phrase “10% interest” scroll across the bottom of the screen.
The cost of bringing financial services to these borrowers is incredibly high. In addition to the financial and physical cost, the CO’s are incredibly stressed by such work. The CO was clearly exhausted at the end of the day – by the way, he did come back for me and he had found a short cut that allowed us to avoid the “road repair” section – but he missed his evening classes at the university he attends. It is important that the staff at PEARL feels appreciated for the difficult tasks they undertake! 10% interest seems a reasonable charge.
In order to make a judgment about the interest that PEARL charges, it seems you must take a good look at the numbers, meet a lot of borrower groups, and then go for a ** insert an adjective that properly describes the above experience** ride on the back of a motorcycle. Then, and only then, can you begin to understand the complexity of PEARL, at least in terms of interest.
Note: Mzungu is what many people in East Africa call Whites.
~~ Please join the lending team for Pearl Microfinance. Our hope is to use this team to help you connect more to the borrowers, staff, and Kiva Fellows at Pearl Microfinance! Watch the video below to see some of the sights along the roads of Uganda (none of the footage is from my trip to Mityana…)~~
The Stories of 5 Micro-Finance Borrowers
At 7:15am in the morning, I got into a car with my MFI’s boss and three other employees. They were headed to Kurgan-Tube, a town about 150km from the border of Afghanistan, to check out a few things at their local branch and offered me to come along. Since this would be a good opportunity to meet with a few micro-finance borrowers in that area, I jumped at the opportunity.
When I got to the branch office, one of their loan officers offered to take me to a handful of his clients that were coming to an end of paying back their loans. These are typical micro-finance customers and the following are their stories:
Matluba Holboeva – Bazaar Vendor
Before the Civil War started in Tajikistan in 1992 and went on until 1997, while taking over 50,000 lives, Matluba Holboeva was a school teacher. When the war started, her salary stopped coming – the school administration simply withheld the payments from her and other teachers. Left with little choice and having to do something, anything, to put the food on the table, she started a little stall at a local market in Kurgan-Tube where she sold fine fabrics.
Instead of paying a monthly rent of 200 Somoni (~$52 at current rates), she purchased it outright for a hefty fee of 1,100 Somoni per square meter (around $300 per square meter). For over 14 years, she’s been selling fabrics at her stall now. She buys them in bulk in Dushanbe (capital city) for about 3 Somoni a piece ($.80) and then resells them at her stall for about 3.5 Somoni a piece ($.92) – making a small profit of just ~0.12 USD on each piece she sells (although there are more expensive items).
She took out her first loan from HUMO last year for about $1,000 for 6 months in order to purchase a bigger selection of inventory. She will be done with repayments next month. Using the increased profits that she realized from this loan, she was able to pay for the wedding of her child – something that every parent has an obligation to do for their kids in Tajikistan.
Did you know? Under the current environment, a teacher’s salary in Tajikistan is about $150 per month ($5 per day). Considering that it costs at least $500 per month to raise a family in the city – in terms of food, housing, transportation, etc. – it’s not surprising that many teachers are leaving the field or supplementing their income by selling goods at local markets.
Mashhura Hidirova – Bazaar Vendor
Ten years ago, Mashhura Hidirova had an opportunity to start her own business. She was living with her parents, as a new market was opening up in her town. She was able to get a good location for about 5 Somoni per day rent (around $1.25/day) – which is a typical price to pay at these markets.
She currently specializes in selling men’s pants – particularly jeans – out of her stall. She makes regular trips to Dushanbe (the capital of Tajikistan) where she buys her inventory – starting at about 25 Somoni for the lowest-cost jeans (around ~$6.50). When she resells them at her stall, she adds a markup of about 20-30% (e.g. same pair of jeans would sell for about $8). However, you won’t find any price tags on her products – or for that matter, any other vendor on the market. The prices in these markets are, in large, dependent on the buyer – their bargaining ability, their buying capacity, and so on.
Her biggest group of clients are students. Interestingly enough, she mentioned, the students these days are becoming more interested in formal pants, rather than jeans. This is mainly driven by the fact that many colleges and universities have a strict dress code – where students may be required to dress formally or they won’t be allowed in the class.
Mashhura is currently on her 2nd loan from HUMO – with just two months of repayments left. Using the profit she made after using the loans, she was able to fix her house and buy a washing machine.
Did you know? If you have good bargaining skills, you can get pretty good deals at the markets these days, as many vendors are forced to offer steep discounts to compensate for the decrease in sales and customers. The ripple effect of the world’s economic crisis touches upon developing countries, as much as the developed ones.
Mahmadi Alihanov – Taxi Driver
We’ve (myself – Kiva Fellow and HUMO’s loan officer) met Mahmadi as he was waiting in a taxi line at the bazaar to pick up new clients. That’s one of the most popular locations in Kurgan-Tube, Tajikistan, as people come out from the markets and need a ride home with their newly acquired goods. The ride in a taxi costs just 1 Somoni (about $0.25), but you’ll have to share the taxi with 3 other passengers – as it won’t leave until it’s filled to capacity.
Mahmadi invited us to sit in the taxi, as he didn’t want to lose his place in line, while he shared some details about himself and his business before and after the loan.
Before becoming a taxi driver, he worked in Russia in the construction sector for 6 years – as over a million Tajiks do. However, 5 years ago, he had to come back to Tajikistan for family reasons and wound up starting in this line of work. The job is very stressful, he said, as the traffic is difficult to navigate and you have to be always on your toes. Plus, working for 7 days a week for 12 hours a day, has its toll and can be tiring.
Each day, he carries about 80 to 100 passengers, which earns him about $20-25 per day (minus expenses). Using the loan from HUMO, he was able to convert his taxi to run on both gasoline and natural gas – which can be significantly cheaper, more efficient, and cleaner. Although this was certainly an expensive investment upfront, it will yield him significant savings on his fuel consumption in the long run.
Did you know? It costs about $350 to convert a vehicle to run on liquid (zhizhenij) gas or about $1,000 to make it run on natural gas. As Tajikistan has rich deposits of both, it is a much more economical form of fuel than gasoline – not to mention cleaner for the environment.
Karima Kahorova – Baker
The fragrance of baked bread permeates every corner on Karima Kahorova’s apartment. It’s no wonder, as she – along with the rest of her family – produce between 2,000 – 3,000 little bread buns per day.
Karima has a culinary degree from a local university that she received years ago. However, as opportunities to use it at a regular job are scarce in Tajikistan, she’s been working for herself for years. She works directly out of her apartment in order to save money that she’d have to pay on rent elsewhere. But it hasn’t been much of a problem in terms of finding clients, as she sells her finished goods in bulk to retailers that then resell it at a local bazaar. A bun from her costs just 20 diram ($0.05) – which is then resold at a market for about 25 diram ($0.06-0.07). A comparable product at a store would be about twice that cost.
She keeps the costs low by working long hours – sometimes, 24 hours a day if needed to fill the demand. The rest of her family helps out, as well – her husband and kids work in the business. But the conditions are difficult – the bulk of the production takes place in the living room, while two small stoves are in the bedroom. “It’s not ideal, but you have to do what you have to do,” she says.
She used her $500 loan from HUMO to stock up on supplies and raw materials, which cost cheaper in bulk. She’ll be done with her repayments shortly and is considering taking out another loan in the near future.
Did you know? When you go to any cafe or choihona in Tajikistan, you will always be served two things regardless of what else you order – a big, fresh pita bread and a pot of hot, sweet tea with lemon. If you are a guest, the host will always break the bread into smaller pieces and will pour the tea in your cup.
Sadbargul Faizova – Raises Livestock
Sadbargul, along with her husband, had one cow when she found out about HUMO’s micro-loans. She took out a 12-month loan for $800 in order to buy a 2nd cow, along with the feed for both of them for the winter.
When she took out the loan, a cow could be purchased for about 1,000 somoni ($260). However, due to the dollar getting stronger over the last half a year, the same cow could cost about 1,500 somoni today ($390). It also appears that they got a good return on investment, as one of the cows recently gave birth to a young, healthy calf.
Although Sadbargul has been doing this work her entire life, she has 3 young sons that she wants to provide an education to, so that they could have more opportunities when they grow up.
Did you know? Each of the Sadbargul’s cows can produce about 2 to 4 liters of milk per day, which can be sold for about 2 somoni per liter. This adds about $1-2 per day to the family’s income.
Parting Thoughts
Many of the borrowers are somewhat hesitant about answering questions and, oftentimes, the questions themselves seem to puzzle them.
Whenever I speak to a borrower, I always wonder about whether the loan helps them to grow the business – today, they have 1 cow, do they want to have 3 cows next year and 10 cows the year after?
The answer, surprisingly, is usually no. The profit from the increased business activity is usually used in consumer purposes – to fix up the house, pay for a wedding, etc. – and the business typically stays on the same level.
Then again, maybe the quality of life doesn’t depend on having 10 cows … and that’s just my Western mentality.
==================================
* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
The Everyday Exotic
Call me a skeptic, but I’m generally not one for clichés. You know how sometimes you read about situations where even though people don’t speak a common language, yet somehow, everyone understands each other? That’s not exactly my experience in Senegal. While the official language here is French, which I speak passably, the more common language is Wolof, which is spoken by the Wolof people and increasingly, almost everyone else in Senegal, though depending on where people are from, they may speak one of a dozen other languages on a regular basis. I spend a lot of my time confused.
Take last week. I went out into the field to a village called Mbousnack. When I first got out of the car, and a few women broke into spontaneous dance of welcome, pointed to their hearts, smiled widely, and said “amie” (“friend”, in French), well, yes, that I got. I was clearly a welcome presence, though I’d done nothing to deserve this. But later when several of them pointed to their knee, I could only guess: Knee trouble? Kiva loan paid for knee doctor? Or perhaps it’s Serer (the language spoken in that particular village) charades – “sounds like knee”?
I have to admit, I had no clue. In these situations, I smile enthusiastically, take whatever info I have, and fill in the gaps based on my best guess. I’m sure they did the same. I can only imagine what they think I said all afternoon.
The agenda for the day was a monthly meeting, and there was a lot of business to be conducted –- 5 month loans repaid, monthly intra-group loans settled and commenced– all in all, quite a lot of money changing hands. The meeting dragged on for quite a while. With a group of 50 women and meticulous hand-written record keeping to keep track of it all in three separate sets of books (Caurie’s books, the village bank’s books, and each woman’s individual book), this can take many hours.
For you, dear readers, I will spare you the full process, and show you just a clip:
This went on for a while.
I’d gone to Mbousnack to interview some Kiva clients for journal updates and also to get some video footage of a group meeting. The value of the electronic equipment I brought into the village was twice that of Senegal’s per capita GDP: my trusty (and now dusty) Macbook (to show Kiva’s clients their profile page on the website), a professional-grade video camera to take footage for media purposes, a cell-phone sized Flip video camera for journal updates, and a digital SLR to take still photos.
Within the first half hour, I’d completed the client interviews, a special challenge in this village: in order to write the journal update in English, I’d ask questions in French, which were then translated by the driver (also engaged as my translator) into Wolof, and then the client would answer back in Serer (another major language in Senegal, and the one most widely spoken in this village). Later I had to ask the Caurie accountant (who is from a Serer-speaking area and therefore understands) to translate from Serer back to French so I can write my English language update. A tower of Babel indeed.
This is the one that started it all. She looks like a troublemaker, doesn't she?
Well, I’d done all that, and the payments and repayments were still going on. So I pulled a chair into the shade, bought some peanuts from a Kiva entrepreneur, and took a seat to wait it out and started chatting (if you can call it that – a few words and a lot of hand movements and pointing) to the women next to me. I had a good time miming various things and each of us talking to the other in a language we knew the other wouldn’t understand. When in doubt, smile widely at a young child, and hope she doesn’t run screaming. I showed the women my digital camera. One of the women asked me to take a picture of her baby. This started a bit of a trend.
One hour and 120 frames later, I’d taken the picture of every child under the age of 2 in the village (except for the one that cried whenever her mother brought her within 10 feet of me), and thanks to the wonders of digital technology, was able to show them their portraits as soon as I’d taken them.
After my tour of duty as the village photographer, I took my seat again. The payments were still going on at the table in front. I surveyed the scene in front of me. Maybe started to nap a bit – the day was heating up and I hadn’t slept that well the night before.
Then it struck me: “holy crap, I’m in the middle of a National Geographic spread.” It’s got all the elements – women in colorful traditional dress with babies strapped to their backs, sitting on the ground under a shady tree, chatting to their neighbor, next to a thatched-roof village, surrounded by a dusty plain of brush and baobab trees.
Right out of National Geographic, no?
Village bank meeting in Mbousnack
Kiva entrepreneur Mai Astou Sène and her wares. I bought peanuts.
Only it also struck me that it didn’t really feel so foreign to me. One, because I was there. That kind of takes away from the exoticism. But also, because I realized that even though I couldn’t understand a word these women were saying, it really didn’t seem all that fundamentally different from any other gathering anywhere else in the world. People get bored, chat with their neighbors. Nurse their babies (OK, that was different – some women went to pick up their payments with a baby still attached to their breast. Just try that at your local Bank of America branch). Put some money in. Take some money out. Munch on snacks. Joke around. Go to the bathroom. Stretch.
Yes, there are differences. Big ones. I can’t email the photos because there are no computers. And even if there were, there’s no internet connection. And even if there were, there’s no power. There’s poverty, health issues, lack of infrastructure, the list goes on. But at the end of the day, everyone pretty much wants the same things: some money to live on, good health, an education for their kids. Maybe a color TV.
As Kiva Fellows, we’re fortunate to have a unique window into places to which few travel – El Alto, Bolivia… Koumantou, Mali …anywhere in Tajikistan, and meet people whom few meet. Because this is our day to day, it’s easy to forget how unique an experience this is. But because we’re here for several months, we also have the time to digest our encounters, to put them in context, to get over the shock factor and dig beneath the surface a bit more than if we were just passing through.
It’s a cliché to say that people are the same the world over. But even this skeptic will concede that there’s some truth in that.
(Just to end this post on a cute note, here’s a selection of my mother and child shots from Mbousnack. All together now: “Awwww…..”)
Mothers & children of Mbousnack
***
Liz is a Kiva Fellow, working with Caurie Microfinance in Thies, Senegal. Learn more about Caurie, or view all their currently fundraising loans here.
***
A week in Siem Reap
HKL, the MFI that I am at for my first Kiva Fellowship, has Kiva loans all over Cambodia, which means if I want to visit with a decent number of Kiva borrowers I have to do a fair amount to traveling. Last week I did my first of several week long excursions to a branch office, this time in Siem Reap. Some of you may have heard of this town before as it is the home to Angkor Wat:
Angkor Wat!!!
Needless to say I did not complain when it was decided that this would be going there and decided to make it into a 7 day adventure. Of those 7 I spent 4 days on the back of motos and meeting with as many Kiva borrowers as possible. The last 3 were spent exploring the surrounding temples with fellow Fellow Katie Davis, who came out for the weekend. While my work as a Kiva Fellow and my time as a tourist were about as different experiences as you can get there was one thing that I was struck by every single day: there is a history and depth to Khmer society and culture that I am afraid I will never truly be able to grasp in the time I have here.
The Khmer Empire dates back to 802 AD and the culture to this day is steeped in respect and tradition. There were signs of this at every visit, around every bend in the red dirt roads and in each temple I visited. At one point we had been on a series of dirt roads and paths for about an hour going to meet a borrower when we turned a corner and I was face to face with an enormous temple, under construction and covered in hand made scaffolding. While I have no idea how old it was one thing I did know was it was built without any big modern equipment, they simply could not have gotten it there. When I asked the credit officer I was with about how this construction was paid for he said that there was probably some money being sent in but many of the local boys and young men were most likely completing most of the work. Surrounded by a village of mostly subsistence rice farmers this temple is a cornerstone of the culture and deemed important enough to renovate.
After one of my days with borrowers and I met a PHD student who lives in the area, she speaks fluent Khmer and has been interviewing local Khmers for about a year. In other words, this was someone who had many experiences to share that could be helpful for me. When I told her that sometimes I became confused when I asked about how business was doing. Many times I would get the answer, good but there are problems, problems that are sometimes never were fully explained to me. She said that in many cases this could mean that the person believes that someone has put a curse on them or there are other supernatural powers at work. It was something that she said was not shared with her until she became fluent in the language and they felt comfortable speaking with her about it. While I can not infer that because I was not able to obtain an answer from a borrower that this was why it just drove home the fact that I am just skimming the surface of the place I am living in. This was both interesting and sad to know. While it did give me a new and useful perspective I had the feeling that my three to five months in Cambodia may not give me enough time to fully break the language and culture barrier that is so critical in the work I do.
After all the work was done for the week it was time to take off my Kiva hat and put on my wide brimmed hat, clip on my fanny pack, break out my 10 cameras and see some sights (mostly figuratively). I think it would be impossible to walk away from Angkor Wat and the countless temples around it and not be just completely bowled over by the sheer magnitude of what was constructed so long ago. The city in its prime was the largest pre-industrial city in the world, bigger than New York City!!!
I think the following description of a procession of the Khmer King in 1296 by Zhou Daguan, a Chinese diplomat is a powerful example of the strength the empire possessed in its hay day:
“When the king goes out, troops are at the head of the escort; then come flags, banners and music. Palace women, numbering from three to five hundred, wearing flowered cloth, with flowers in their hair, hold candles in their hands, and form a troupe. Even in broad daylight, the candles are lighted. Then come other palace women, carrying lances and shields, the king’s private guards, and carts drawn by goats and horses, all in gold, come next. Ministers and princes are mounted on elephants, and in front of them one can see, from afar, their innumerable red umbrellas. After them come the wives and concubines of the king, in palanquins, carriages, on horseback and on elephants. They have more than one hundred parasols, flecked with gold. Behind them comes the sovereign, standing on an elephant, holding his sacred sword in his hand. The elephant’s tusks are encased in gold.”
Anyway, it was a truly amazing week; I learned a lot, had a lot of fun and will never forget it. I have put together a little video, using the phrase of legendary New York Mets announcer Bob Murphy, as a little “happy recap” of my week there . Hope you enjoy.
Good-bye for now, Kisumu
“Be late, but get there”
This sticker, prominently displayed on the dashboard of the Mombasa bus, did not inspire much confidence that we would reach our destination in a timely manner, but it at least reassured my safety a bit more than another common sticker – “drive it like you stole it.”
Occasional Frequent maniacal driving aside, you are also most likely already aware of the fact that things in East Africa rarely operate in a way that someone from the United States (my home country) might call prompt. This has proven to be a way of life that is right up my alley.
While consistently late to most things in the U.S., here I have been “right on time”, and dare I say even “early” to many events. As someone who was once told by a professor that time doesn’t apply to me, African polepole time (slowly slowly) is something I can get down with.
So, in the “be late but get there” spirit, here I am, much belatedly, writing a blog post to say goodbye to K-MET and my first Kiva placement.
I write this now from Dar es Salaam, Tanzania, my second Kiva placement, but I am transported by my thoughts back to Kisumu, Kenya to the K-MET office, to the farewell lunch where some weeks ago I said goodbye to my friends and coworkers.
Mama Monica, K-MET's Executive Director and me (with my gift of necklace and bracelet/arm band)
It is awkward to know that an event is in your honor, when really you feel as though it should be the other way around, that you should be the one treating your hosts who were so kind for four months. This awkward feeling intensifies when you realize that after lunch your co-workers will go around in a circle and each one will say something about/to you, while everyone else stares directly at you.
My cheeks were pink, yes, but as each friend said goodbye to me, I tucked their words away in my memory, needing to save them, to keep their smiles and the long days we spent together with me always. It is hard to explain how touched I was by some of the things said to me that day, how much the friendship of everyone at K-MET has meant to me.
- John Asuke is one of the most hardworking, admirable men that I have ever met. He carries K-MET’s microfinance department on his tai kwon do trained back, working even with typhoid fever. And he has some sweet dance moves.
When I stood up to say a few words, my mind drifted over the last few months.
There were, of course, small moments of difficulty and discomfort, illness and confusion, grapples with identity and development work, as well as much larger moments of grief and mourning – the sudden death of friend and co-worker Alice Otieno, (the office is lacking your bright laughter, Alice) and the deaths of my two grandparents (your cactus, planted 38 years ago in Nakuru, is huge now, I wish I could have told you) – that made my heart clench tight on a number of days.
As these darkened clouds of memory billowed in my mind, other, brighter, memories joined them, crowding, jostling, calling out for recognition.
Memories of the comfort, care, and love given and received in time of sadness and grief, scalding morning chai, field visits to spirited borrowers, bumpy dirt roads, music and more music, squabbling roosters in the yard, Indian food with friends, stone faced babies, nights spent looking at the stars, dirty garbage everywhere, bright bougainvillea flowers, the smell of burning trash, hot nyama choma and cold Tusker beer, silhouettes of women carrying water up winding burnt orange paths as dusk falls over Kenyan hills, layers of dust and sweat covering skin, kind helpful strangers, haggling for mangos, stories of humor and strength in difficult situations, wind rushing on the back of a motorcycle, elaborate handshakes and fist pounds, laughter, tenacious grips on life, love, and family, Obama calls in the streets, the hum of sewing machines, real hugs, the intimate glimpses into people’s businesses and lives, their hopes and challenges, and small moments of complete bliss – the feeling of being in the exact place I was meant to be in for that moment.
Together, all these moments have woven themselves together to make an indelible impression on me. I am grateful to have had the opportunity to be a part of people’s lives in Kisumu and to have them become a part of mine.
- This borrower group in Mombasa, Kenya includes many enterprising women who hold steady jobs and have created their own small businesses in order to supplement their primary income
- Bernard, Kiva Borrower, lost his business during post-election violence last year when his sewing machine was stolen. He fled the area for months, then returned to start again, buying a new machine with a K-MET loan
I like to think that I will be back in Kisumu some day, to breathe in that dusty lake breeze and have some fried tilapia and ugali with my friends, catching up on all the stories I have missed.
So oriti ahenya for now, Kisumu and K-MET. Thank you for all that you have given me; I hope that I have been able to give something back.
How Dominican Republic Loans Help Haitians
Kiva Haiti loans are on their way, but until then you can…
Continue Reading 23 March 2009 at 14:34 ashleyolivia 7 comments
An Atypical Borrower: From Riches to Rags
Ms. Nguyen Thuy Minh, a Kiva borrower with SEDA
One of my main roles as a fellow with SEDA in Vietnam is interviewing borrowers and then writing a journal update so that lenders can see how the borrower is doing. I have many questions that I like to ask most of the borrowers and one of my favorites is quite simple: What did you do before you started this particular business? This question is great because it really helps me learn about the person I’m interviewing; their previous jobs tell a lot about them. Take for example Ms. Nguyen Thuy Minh.
Ms. Nguyen, 45, currently runs a mobile phone business which she started four years ago and helps her daughter-in-law raise animals. Six years ago her husband was killed in an accident and that accident changed her life as she knew it. When most people think of microfinance they think of a poor person trying to empower themselves out of poverty and thus we assume that person was always poor and that microfinance is the opportunity they never had before. Ms. Nguyen’s case, however, is completely the opposite.
Prior to her husband’s accident, Ms. Nguyen’s job was running a confectionary factory for 16 years with her husband which employed over 60 workers—now that’s a favorable impact on a community, a locally owned business which creates jobs! She and her family were very well off until her husband’s death. For some reason or another his death meant the closure of the factory (I didn’t want to pry into all of her personal details about the accident and accompanying results but I assume her husband had many debts) and quickly propelled Ms. Nguyen and her family into the type of poverty they had never known before.
The location that Ms. Nguyen and other borrowers in her community make payments on their loans.
As Ms. Nguyen described her situation, she said her best option was to start a mobile phone business in her hamlet but it meant that she had to work harder than before for less money to simply get by. To help her business along and to help begin increasing her standard of living she decided to apply for a micro-loan (before, with the factory, her credit was good enough to get loans from traditional banks). Her loan has since helped increase her daily income and has allowed her to purchase more new phones in bulk, thus reducing her overall costs.
Ms. Nguyen’s story is a perfect example of an atypical borrower, but nonetheless microfinance has become a valuable tool for her. With that in mind, I think her role as Group Leader is also valuable to microfinance in her community because she can share her knowledge of business management with her other group members and possibly with many others in her community. In fact, one of my goals now is to see if Ms. Nguyen could possibly run a work-shop on business management with the other SEDA borrowers in her community which perfectly answers another question I like to ask borrowers: what impact do you and your business have on your community? And my oh my, what a potential impact Ms. Nguyen can have!
A Day in El Alto
El Alto is the place where microfinance pretty much started in Latin America and it has held my interest for years. This cold, wind-swept city is an incredible phenomenon of urbanization, globalization, and pretty much any other -ization you can think of. La Paz, the city proper, sits in a bowl high up on Bolivia’s altiplano. Here, the city is protected from some of the bitter cold and wind. High up above the city, the flat plateau-like city of El Alto, is where the city’s poorest residents live, work and get by. A place washed by persistent, filthy, rotten poverty.
On the Edge of El Alto
Despite the cold, the sun at this altitude not only burns me instantly but imbues everything with a surreal light. Perhaps this is why El Alto struck me as one of the most colorful, vibrant places I’ve ever been. Markets are pouring out of windows, stands, corners and the very faces of El Alto residents. This desire to sell, to move, to change seems to me the very essence of El Alto. Most residents have come from “el campo”, or the country, looking for a better life. They stopped here and did their best. Now this sprawling, freezing metropolis of nearly a million people is a city unto itself boasting an apparently famous youth hip hop movement (must learn more about this), industries budding on every corner, a re-constitution of traditional art now mixed with urban vibes, music, family and of course- the market. Here is where we find Kiva funded clients.
El Alto Market
I met Saturnina and her husband Eufrin. She had so much to say about how Emprender needs to lower their interest rates, that I couldn’t get a word in edge wise. I had the long list of Kiva questions to run through, but standing there talking to her, the sun searing my back, through the shirt I have, the sweat slipping down my back and soaking the top of my jeans, I just didn’t get to them. I recently learned you can sunburn through your clothes. This is a first for me. I suddenly felt my eyes tracking, my mouth cracking and my feet swelling. Too much walking in too much sun for too long with too little water. I ended the conversation, walked promptly to the juice lady behind me and drank three glasses of freshly squeezed orange juice one right after the other. Despite not asking my normal questions, I learned from Saturnina, dressed in colorful clothing and mysteriously with some sort of leaves stuffed in her ears, that she has several loans from many MFIs and while Emprender’s interest rates of 39% annually are the lowest she pays, they are still too high. Duh. How do we lower them? She is over-indebted and I’m reminded again of the limits of microfinance.
Saturnina and Eufrin
For lunch, I had the single foulest food I’ve had yet. And I have had goat head soup. Charquecan is llama meat dried in the sun until it resembles beef jerkey. The word jerkey, coincidentally, comes from charque. Then you shred the llama meat and serve it over homily and dehydrated potatoes, or “chuño” with a chunk of what appears to be mostly rotten cheese and a hardboiled egg. It comes to you looking like a big bowl of hair with an egg. I sat with Alberto, a really nice, unusually single loan officer who is probably the kindest person I have met here. Loves charquecan, and is stoked that I’m shoveling it in my mouth with equal proportions of fanta. He says he’s worried about the poverty in his country and wonders how long it can go on like this. “Estoy orgulloso de ser parte de la solución”, or I’m proud to be part of the solution. It was like he was speaking straight to my heart.
Alberto, an Emprender Loan Officer
We return to the office where I pull myself together, organize a bit, and prepare to leave. Suddenly the confusion. Its my first day in this particular field office and everyone is worried. How will she get home? Can she understand the buses? She has her computer, can she make it to the bus stop? I knew what I was doing. I could see the stop from where we were standing. I just needed to get going so I’d arrive back home in the La Paz, or “the hole” before dark. After some commotion, a kiss on every face I’m off. Except. The security guard truly cannot handle me walking alone and insists on putting me in a bus to take me two blocks to where I catch the other. There is literally nothing I can do about it that would be appropriate. He flags one down, opens the door, negotiates with the bus driver and literally helps me into the front seat like my dad on the first day of school. I take these buses constantly, and am proud not to be a fumbling idiot in them. I have never felt so white, or so incapable of organizing my own time. The bus immediately turns down a different road. I ask to get out and the bus driver says, no, he has to first make a U turn. Suddenly I’m lost. Its getting dark. I am carrying a camera, a computer, a video camera and some money in the middle of El Alto. Sigh.
About 45 minutes later, after many conversations I get to a bus that takes me mostly in the right direction. I’m in. Its steaming with people’s warm breath in the frozen air. Cholita’s bowler-hats blocking my view. Its warm and as I start to drift off BAM! We blow a tire. Standing in the hail 45 minutes later somewhere between El Alto and La Paz, trying to catch another bus with the throng of Bolivians, I am reminded of how convenient everything in the US is. The metro with its predicted arrival times, clean and orderly. I’m frustrated, but I have some sort of inner calm that comes with knowing that I’m going home to a warm house with food in the fridge. Not just tonight, but always.
Are you My Entrepreneur?
As a Kiva Fellow volunteering for a Microfinance Institution (MFI) in Puno, Peru, one of my responsibilities is to interview women entrepreneurs who have received loans from the MFI, Manuela Ramos, and Kiva. During the interview the goal is to obtain their photos, learn how the woman used the loan, and gather more information about her life – her hopes, dreams and hardships. With this information I can, and other fellows and MFI employees can, provide a follow up to the people who have made loans to these entrepreneurs through Kiva’s website, creating a stronger connection between the lender and the borrower, who are living, for the most part, on opposite sides of the world. While I truly believe that the journaling process is vital to Kiva’s values of transparency and fostering connections, until I arrived in the field and took my first trip to conduct interviews I had no idea how challenging this process could be!
Do you remember the children’s story, “Are you my Mother?”, that follows a freshly hatched, lost baby chick on it’s quest to find it’s mother (I believe it was mandatory reading to obtain your kindergarten diploma)? The chick begins it’s journey by asking animals, “Are you my mother?” and after a series of defeats, eventually results to asking inanimate objects, until finally a power shovel delivers it safely home. As I stepped out of the “condi” (a small bus that resembles the old VW vans that were once so popular in the U.S) I couldn’t help but feel like this wide-eyed baby chick – a little lost, a bit confused and highly ambitious in my seeking. Staring down at my “address” list, which contained districts, but no actual streets or numbers of the entrepreneurs’ residence, I rolled up my jeans and started hiking up the hill.
Like the baby chick who begins it’s journey in a somewhat guarded manner by asking similar looking animals, “Are you my mother?”, I looked through the poor quality, black and white photos of the entrepreneurs I was meant to interview and the district map and decided to walk through the town in search of these women. When I saw a woman who resembled one from the photos I would simply ask, “Are you my Entrepreneur?”, a practical approach in theory, but, as I would soon discover, not in reality.
Walking up the hill in the increasingly heavy rain, I encountered the first woman that I felt matched a photo I had in hand and, after a customary “Buenos días señora” asked, “Are you Paula Mamani de Sanizo?”. After her initial confusion, which I imagine stemmed from being approached by a strange looking, rather pale foreigner with a thick accent, she smiled and let me know that she was not this woman, but I could find Paula in the blue house up the road. She pointed up the road, which seemed to stretch for miles, directly up hill, and I smiled, thanked her for her help and set off.
As the haze of blue dots started to become structures with roofs and doors I decided that it was time to ask again, “Are you my entrepreneur?”, but this time, with wider search criteria. No longer relying on the photos for guidance, I began asking every woman I spotted if she was one of the women on my list, hoping that if she wasn’t, she might at least point me in the right direction. After a series of, “no, me disculpe señoritas” I broadened my search yet again to include inquiring to any moving object. Just as I was getting really discouraged the rain subsided and I saw a young boy on the side of the road. Although he resembled the women in my photos as much as the power shovel resembled the baby chick’s mother, I resolved to not give up. Changing my question to, “Do you know my entrepreneur?”, I approached the boy. Not only did he know one of the entrepreneurs, but one of the women was his grandmother and another his grandmother’s sister, who both happened to be peeling potatoes behind the house we stood in front of. Just like the power shovel, albeit a bit cuter, he took me by the hand and delivered me safely to two of the entrepreneurs. As I basked in the brightening sun and spoke with the women about their loans, their families and their dreams for their children, I knew this experience was well worth the difficult journey. My day unfolded in this fashion, until I had interviewed over half of the women on my list and decided it was time to let the condi deliver me back to Puno.
The following day when I arrived at the office, I asked the Kiva coordinator, who is an employee of Manuela Ramos and is in charge of posting the borrower profiles to Kiva’s site, if my experience was standard. She replied that although my day sounded a bit more chaotic than normal, as the town I visited is one of the most rural on Manuela Ramos’s list, it can be very difficult to find an entrepreneur outside of the loan officer’s bank meetings, where 12-30 women in the same community bank come together once a month to take out and pay back loans. So why doesn’t she simply go to the loan officer’s bank meetings where all the women are together? Because a picture is worth a thousand words (or at least $25 minimum loan!) and the photos on Kiva’s website that are taken of the women in their place of business, which is often their home as well, is what Kiva lenders have repeatedly indicated is what they want to see. While going to the community bank meetings assures that the women will be present, it doesn’t allow their photos to be taken in their individual places of business. As my work here consists mostly of writing journals, not borrower profiles, which are the initial descriptions and photos of the women who are requesting a loan, I will be able to visit some bank meetings to conduct interviews because the importance of the photo carries less weight. However, the Kiva coordinators who are in charge of posting borrower profiles in Manuela Ramos’ seven branches throughout Peru will continue conducting their interviews by traveling to the entrepreneurs’ towns and, with or without exact addresses, attempting to find the women in their homes and businesses.
So what did my experience teach me? First, although Kiva provides interest free capital, the funds don’t come without some work on the MFI’s behalf. Conducting a cost/benefit analysis of Kiva for Manuela Ramos is actually one of my projects as a Kiva Fellow and one that I will take very seriously! Second, a plastic bag can act as a rain hat, a protective cover for your documents and a small blanket to sit upon when necessary. And last, with a little embarrassment, a lot of persistence, and the help of others, just like the baby chick you will find your way.
hot showers–not so simple
Warning: this post has absolutely nothing to do with microfinace. Just gives you a glimpse into what is involved with taking a hot shower here in Nimasac, Guatemala.
When I was first accepted as a Kiva Fellow, I was asked if I had any “special” requirements. My response was that I wanted to be relatively safe and be able to take a hot shower.
Taking a hot shower is no simple matter in Guatemala. First of all, most homes do not have running water. (this includes the family that I am living with). So, in that situation, here is how you get to take a hot shower. First, they run a hose from the closest water source (in my case about a block away from the house) and fill this black (20-50?) gallon drum up with water. Then you light a fire underneath the drum and wait until the water gets hot. This big drum is always located above the shower, as it is gravity fed.
Now it gets dicey……because without any cold running water to “mix in” with the hot water, instead of a “hot” shower, you can get a SCALDING HOT shower……..so, it takes some time to figure out exactly how big of a fire to build and how long after the fire has been built is it safe to take a shower…….go too soon and you get scalding hot…….wait too long and it’s tepid at best.
When there is running water, as there is at many hotels, they use this kind of an electrical contraption which is located right there in the shower, right above the shower nozzle. The one pictured here is one of the “safer” versions…..many have electrical wires portruding and a lot of electrical tape wrapped (sometimes loosely) around them. And, when you’re tall like I am and the water splashes on the exposed electrical wires, that too gets a bit “dicey”.
And, as long as we’re talking about “bathrooms”, I thought I’d share a photo of the outhouse that my host family and I use. (actually, it is quite pleasant, as the view from the crack in the door is of the beautiful countryside surrounding Totonicapan)
Saludos de Nicaragua
Hi Kiva fans!
My name is Brent, and I’m a member of this class of Kiva Fellows that you haven’t seen on the blog yet. Yeah, my start got a little delayed. But I’d like to think of myself as fashionably late, and getting here just as the party is in full swing. Except that unlike most, this is a party I was actually invited to.
I’ve been placed with AFODENIC, one of Kiva’s field partner’s based out of Managua, Nicaragua. AFODENIC is actually a catchy acronym for Asociacion Para El Fomento Y Desarollo De Nicaragua (Association for the Promotion and Development of Nicaragua). I’ll be working with people here to help ramp up their journal updates for Kiva lenders, and do what I can to further both Kiva’s goals, those of this partner microfinance institution (MFI). I’ll also stay out in the field with the next team of Kiva Fellows to work with a different Kiva field partner.
After so much looking forward to this opportunity, I’m finally here and started work with my host MFI. And now I’m sitting in a Managua pizzeria with wifi, where they seem to be playing the greatest hits from my sixth grade dance.
I arrived the other day, and as I sat back in my taxi from the airport and started to take in the sights and sounds of Managua, it’s strange, but one of the first thoughts that came to my mind was, “Wow, it’s good to be back.” In the next instant I realized what a ridiculous thought that was, because I’ve never been here before.
For a minute I tried to think of what country I had passed through over the years that I was actually thinking of. Maybe the outskirts of Lima…or something from Guatemala? Maybe even a hint of South Africa…or India?
The sights going by along the highway were the signs of poverty and development, from the old cars in the next lane, to the landscape, to the metal shacks and basic housing with the clothing lines outside. There was the smell of something burning nearby. And I realized, this was actually a little of all of those places, and in a way, I was in fact “back.” If anything, I was back in the real world.
I say the real world because, after all, this is much closer to where most people come from. It’s easy to forget in the U.S. when we have so much on our mind, and now our own economic disasters capturing our attention. But depending on whose numbers you use, a good 3 billion people on the planet are living on less than $2.50 a day. The rest are, well, somewhere in between. So that’s practically half the world’s population that’s poorer than the poorest people in the U.S., and that’s way too many.
The most exciting thing is that this time I’m not just passing through. I’m here to do something to help close that gap, and do work for a website that is letting all of us be a part of the solution with loans that change people’s lives.
I’ll be back soon to share more of what’s happening on the front lines of microfinance in Nicaragua! But for now, I’m going to enjoy a little Vanessa Williams…
Brent Zettel is a Kiva Fellow working with AFODENIC in Nicaragua. Leave a comment, or email kivabrent@gmail.com with thoughts, questions, or something you’d like to hear about.
——————————————————————————————
Don’t forget to visit Kiva.org and lend your support Nicaragua’s entrepreneurs! To get involved with loans posted to Kiva by AFODENIC, click here.
What do you do when a client doesn’t pay?
You go and talk to them, of course.
But how do you know if they’re telling the truth? How long do you wait on their promise to pay? What if these promises go on and on without being fulfilled?
How do you gauge how committed they are to eventually paying?
Is there anything you can do to make it easier for them to pay back?
And if they’re still not paying, at what point to you draw the line? Call it quits? Send the case to court?
And is that even worth it? What does that accomplish if the loan is smaller than lawyer fees? And what happens if the court’s only recourse is seizing the few belongings the client has, such as a refrigerator and TV? And what if that refrigerator and TV hold virtually no resale value because local stores offer large and long lines of credit for such items to just about anyone that walks in the door?
What do you do if a client’s son died, and he became so depressed he stopped everything and turned to drugs? What do you do when he says he’s back on his feet again, and will get his business going again soon? How do you know the drugs are out and the work is in? How long do you wait to see if things turn around?
What do you do if all that the client invested in was stolen? What do you do when that setback has led to him to give up on his business and rely entirely on a brother to put food on the table? What do you do when he says his brother has a boat for sale, and if only he can sell the boat, there will be more than enough money to pay back the loan? How long do you wait? What alternatives do you have?
And what do you do, if you know that this person has nothing, and if the courts so choose, he will end up in jail? What does that accomplish? The MFI doesn’t recoup any expenses, the client is in no way more able to pay back the loan, and the individual, their family, and the reputation of the MFI all suffer.
So what do you do???
The only answer I have so far: you wait. And you hope…
The Colors of Money
A couple of weeks ago, I traveled to Koumantou, Mali to visit with several solidarity group clients of Soro Yiriwaso. The women of the Groupe Kokatia graciously allowed me to film the financing of their loan. Solidarity loans are used broadly at Soro Yiriwaso, and among many of Kiva’s field partner institutions. The strength of a community of women is indeed universal!
I hope that you will enjoy this short movie—the magnicent colors and smiles, in particular.
Beirut’s southern “suburbs”
Beirut was recently ranked on top of a New York Times list of places to visit in 2009. The reason, luxury hotels, the nightlife, and Lebanon’s vast historic heritage spanning centuries of civilization. That’s not the Lebanon I saw last week during my first field visit. Instead, I went to the southern suburbs of the city, also know as “the suburb” (in Arabic, El-Dahyeh).
My MFI, Ameen, was kind enough to arrange for me to be driven to one of two of its branches in Burj Barajneh where I met the loan officer. I was grateful to be driven here since as soon as we entered the area I realized that, left alone, I would surely get lost. Within minutes, I realized that the driver himself was lost.
Ameen has 10 branches in El-Dahyeh and approximately a quarter of its Kiva borrowers live or work here. Though technically not a part of the Beirut municipality, El-Dahyeh is very much a part of the city. Many people who live there work in other parts of Beirut. Also, many go to El-Dahyeh to do business, especially to shop at its bustling markets. Here you will find a whole variety of inexpensive things from furniture, clothes, and household items, to fresh produce and other food products.
One of the first things one notices in El-Dahyeh is the poor state of the infrastructure. Unpaved and poorly paved roads snake their way between buildings that seem to have no particular order to them. In places, the road narrows forcing cars to wait for oncoming traffic. In others, stores place their wares on the road, blocking traffic. Everywhere, pedestrians must compete for space with cars from all directions.
This state of affairs has to do with the history of the area. This part of town has developed into an urban jungle of sorts in a span of only thirty years. Before this lay quiet coastal towns surrounded by orange groves and fields producing various types of fruit and vegetables. These towns remain in name only, though an occasional old house squeezed between multistory apartment blocks reminds you of the time that was.
Burj Barajneh was once a small town, as was Hay Essillom or Haret Hraik. For 15 years starting in 1976 Lebanon experienced a brutal civil war. During this time, marked by a weak or nonexistent central government and several domestic and international wars, the area became a haven for the internally displaced and those looking for economic opportunity. Most came from the south of Lebanon.
The residents of El-Dahyeh suffered the most under the 2006 war with Israel. Whole blocks were leveled and people were forced to leave their homes and businesses. Many Ameen clients in this area lost their businesses and some even lost their homes. Now, almost three years later, the signs of the war are hardly visible, though when I mentioned this to someone, I realized it required a trained eye to actually see the damage and the rebuilding that took place.
Right now, one of the tasks I am working on is preparing a process manual for Ameen’s Kiva loans. So, during my first visit to El-Dahyeh I observed the work of the loan officer and documented the various tasks they perform and how they screen for potential clients. In a subsequent visit to El-Dahyeh a week later, I made visits to a list of Kiva borrowers and later wrote journals for them.
The borrowers I visited were Ali, Samir, Youssef, Najwa, and Haitham. To view the journals, click the link on each name and scroll to the bottom of the page. These are the first journals to be written for Ameen borrowers in Lebanon.
—
I am Nemr, a KF7. I am spending 12 weeks at Ameen in Lebanon. You can also check out my personal blog here.
Check out some of Ameen’s borrowers and make a loan today by clicking here.
ADIM: A Boutique Microfinancier
I have been working with ADIM in Nicaragua for just over one month now, enough time to get a pretty advanced rough picture of how this organization works. It has been an interesting four weeks, the first two of which found me frantically trying to keep up with the high-speed pace and lively Spanish chatter of Javier Flores, the organization’s Credit Manager, who is also responsible for managing much of ADIM’s relationship with Kiva. I also found myself with a bit much downtime, which, ironically, stressed me out since I had so much to do during the three months I would be in Nicaragua. We had a partnership to cultivate, after all.
Although I have found that the Latin reputation for leading a slower pace of life (both personally and professionally) does apply generally to Nicaragua, it does not hold true in this particular case; rather, ADIM is a very small organization, and it was in the middle of planning/budget season, so I guess I just happened to arrived at an especially busy time. The biggest challenge was getting the ball rolling. And now, thankfully, it has.
A few stats on ADIM:
- ~40 employees
- 8 branch offices
- ~$500,000 gross loan portfolio
- ~$170 average loan size
- Serves 90% women, both individual and group loans
- Currently has a 3-star rating on Kiva and hoping to go from pilot to active very soon
- Smallest member of ASOMIF (Nicaraguan Association of Microfinance Institutions)
Overall, ADIM is a very pretty and put together organization. In my time here, I have observed high levels of camaraderie, a genuine interest in helping fellow Nicaraguans, and excellent work ethic. Even peer organizations have noted the charm and virtue of ADIM.
I have more recently been spending the majority of my days in the branch office in Masaya, where most of the Kiva magic happens. Most of ADIM’s Kiva loans are disbursed through this branch, and ADIM plans to channel all Kiva funds through here in the near future. Branch Manager María Violeta Perez Muñoz (Violeta), in collaboration with Javier, is credited with managing a lot of the Kiva process. Check out the video of the Masaya office below.
You can find more information on ADIM and its fundraising loans by clicking here.
Join Team Nicaragua by clicking here while you’re at it!
How Do You Run a Shop in a Neighborhood with No Cash?
I’ve always been curious about what happens when microfinance clients open businesses in places where there is very little capital. Many operate small shops of household necessities but the placement of such stores is generally based more on proximity to home than a strategic evaluation of which part of town is most profitable. So how do they cope if their customers can’t afford to buy anything? Last week, I got my answer: credit.
Pen and Paper: How to issue credit, the old fashioned way
I was in the field with the Kiva Coordinator, John, collecting journals. We were meeting with a client who sells vegetables in a small neighborhood in Kigali, Rwanda. After a series of preliminary questions, I asked the client if he was having any difficulties with his business.
“Creditors,” was the translation I received for his answer.
I paused, trying to re-translate it into something that would make sense. I couldn’t quite guess what he meant, so I just asked. Without going back to the client for more of an explanation, John expanded upon the client’s assertion,
“His customers owe him money but they’re not paying.”
Ahh so he may mean “debtors,” in which case this microfinance client is both a credit-receiver and a credit-giver. Could it be? People always speak about Africa’s cash only economy and I have yet to meet a Rwandese with a credit card so it hadn’t occurred to me that there was a widespread grassroots credit system sans plastic. I shared my surprise with the Kiva Coordinator who gave me the dreaded answer:
“You didn’t know that! Everyone knows that!”
“No one ever told me!” I exclaimed in my defense.
“That’s because it’s so obvious!” John countered. Touché.
Apparently, small shopkeepers all over Rwanda accept credit in the form of an IOU from their customers. If I was going to be the last to know (did all of you already know this?) I wanted to at least fully understand it, so I dove in. What John and the client explained is that most of his customers are regulars. They live nearby and he knows them well. A lot of them don’t have cash in the middle of the month but they still need vegetables so he keeps a record of what they have purchased and at the end of the month he presents them with their tab. He keeps careful records to know exactly how much each customer owes him. When I asked to see the records, he produced three notebooks with pages and pages filled with customers’ bills.
Here, one page of his careful notes of what his customers owe
Lately, he says people aren’t paying. Unfortunately, he doesn’t feel that he can stop accepting credit. If he did, “he wouldn’t sell anything,” John explained. But how does he ensure repayment? How can he get the money if his neighbors insist there is none? He didn’t seem to have an answer. The difficulty with grassroots credit, I suppose, is that there are not systems to ensure that the creditor is ever paid. He could refuse to sell to his customers until they pay, but then they could go to another vendor. He could employ some sort of social pressure since he is based in a small community and try to make it a social taboo not to pay, but if many people in the community are in the same position, that won’t necessarily work.
I don’t have a good solution as to how to get the client his money. We all talk a fair amount about the principle of credit and debt. We debate whether it is wise to purchase things if you don’t have the money to do so. As a shopper myself, I have attempted not to purchase goods on credit unless I knew I would have the money to pay for them at the end of the month. So are this client’s customers wrong to buy vegetables when they’re not sure if they can afford it? If he stopped accepting credit, sales would decrease because clients couldn’t afford the goods or because there would only be a few days each month that they could. The credit keeps his sales more constant which from a stocking perspective is wise in a perishable goods market. But if his customers are buying without knowing if or when they can pay, then credit isn’t being used properly. For me, a large credit card company would be the victim and they would ultimately sock it to me through large fees. Unfortunately, this client doesn’t have that kind of leverage. So what’s the solution? Is there a scenario in which he can keep his business profitable in a neighborhood where customers can’t pay?
If you’d like to see all of Vision Finance Company’s currently fundraising loans, click here. To join Kiva’s Vision Finance Company lending team and to support Kiva’s Rwandese entrepreneurs, click here.
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. In December she completed her first placement with BRAC Tanzania.
On the Road to Nuevo Celendin
“What is that feeling when you’re driving away from people and they recede on the plain till you see their specks dispersing?-it’s the too huge world vaulting us, and it’s good-by. But we lean forward to the next crazy venture beneath the skies.”
-On the Road by Jack Kerouac
No quote better summarized my feelings when I left the Bay Area to start my fellowship with Kiva in Peru. This video is a glimpse into my crazy adventure; a day in the life of a Kiva Fellow. But more importantly, it’s a window into the life of the loan officers at my MFI, Manuela Ramos/CrediMujer, who work hard to reach borrowers in rural Peru. Enjoy!
__________________________________________________________
Hi, my name is Diana Rodriguez Wong and this is my fourth week as a Kiva Fellow in Tarapoto, Peru.
To support women entrepreneurs please visit the Manuela Ramos/CrediMUJER loan page or join the new Manuela Ramos lending team.
Life is Beautiful in Bénin (Doucement, Yovo!)
An appreciation for the people and culture of Bénin
Continue Reading 17 March 2009 at 06:58 farmers2foodstamps 4 comments
El Salvador shifts Left. Poverty still front and center.
The leftist candidate Mauricio Funes won El Salvador’s presidential election last night, ending 20 years of rule by the rightist ARENA government. Funes’ party the FMLN had developed out of a Marxist inspired guerilla movement that opposed ARENA’s government during the country’s gruesome civil war in the 1980’s. While FMLN supporters took to the streets last night, riding into the capital on beat-up pickup trucks packed with red-shirted youth, waving FMLN flags to celebrate their first presidential victory, there was a more somber mood in ARENA headquarters and in reports from the international press. Though ARENA has spent years crafting a free-market economy, with a stabilized banking system, a free trade agreement with the United States and courting multinational investors El Salvador still remains one of Central America’s poorest economic performers. Over half of Salvadorans live in poverty, without access to consistent food, medicine, work and often quality education. 20% of El Salvador’s GDP is comprised of remittance payments from family members working (illegally) in the United States. More than just a statistic, though, remittances have had overwhelming effects on the social political and economic realities of El Salvador including microfinance. Often small entrepreneurs can only afford to cover their monthly interest payments with support from the money transfers from family living abroad. Especially now, during tough economic times in the United States remittance payments have been slowing causing wide-spread loan defaults and instability in the MFI industry in El Salvador.
Last night I stood in the streets of San Salvador sharing in the excitement of Salvadorans at a possible new direction for their tiny country. Some old enough to clearly remember the bloody civil war of the 80’s but many victims of an ongoing struggle against hunger, lack of work and no hope for change. Their songs and dancing where encouraging, but didn’t distract me enough from noticing the hundreds of vendors that had taken to the streets hoping to sell party t-shirts, sausages and light-up head-wear to celebrants. After all, there’s work to be done and many mouths to be fed in El Salvador. Good luck, Funes.
Entrepreneurs take to the streets to sell Funes "gear" while the masses celebrate.
Questions on Collateral at Pearl Microfinance
In a previous post, I mentioned that many clients of microfinance pledge real items not just their reputations as collateral on their loans. (Please see “A message from Uganda” for a more in depth discussion of the idea.) A comment was made that asked a few interesting questions. I started to directly reply on the post, but realized that the answers were long and that they might be interesting to others.
(As a side note — those of us who are writing on this Blog love hearing your comments on our postings. Please comment if you are so inspired, especially if you have questions, we would love to write about what you want to know about!)
Before attempting to answer the questions asked, I want to respond to a well-deserved critique that the comment made, which is that the situation that I described is potentially only relevant at Pearl Microfinance Limited where I work. This is totally true.
Kiva Fellows, as people who are trying to understand and evaluate Microfinance as a concept, write about our microfinance institutions and post them on the Kiva Fellows Blog so as to create a group of voices talking about the particulars of our respective institutions. Hopefully, reading this Blog in totality allows people to gain a sense for what Microfinance is like in different countries, and even within the same country at different institutions.
I forget to be careful in my posts to be clear that what I see and observe at Pearl Microfinance may only be the case here. Please consider that stated for the rest of the post.
Grace, the Kiva Coordinator, in front of the Pearl Microfinance field office sign in Lugazi
Ok – on to the questions.
Where does the microfinance institution keep such collateral? I was describing clients who pledge things like sofa sets, cows, goats, and fridges so this is a very relevant question.
(I wish the answer was, “there is a corral in the back of the office where all the animals are kept and a very comfortable lounge with dozens of sofas,” that creates a very amusing visual.)
Pearl Microfinance only seizes the collateral if the client cannot repay. Under these circumstances the client’s bicycle, stove, dish set, stock of chickens, is sold, and the money made off the sale is kept by Pearl. The glitch in this plan is that if clients go into hiding because they are unable to pay, they know that the sale of their possession will be their punishment and thus they run away with all their possessions. This leaves the other thing that they pledged to serve as their collateral – their friends. In the case that the client goes into hiding, the remaining group members are required to pay on behalf of the defaulting client if the defaulting client’s collateral is in hiding as well.
Many of our borrowers here at Pearl have small stands like the ones in this photograph.
(this is rephrased) Do the items pledged have worth that is actually equal to the loan amount?
This is something that is decided by the credit officers at the time of the loan request. When a group loan is requested a credit officer goes and sits with the members. Each member then comes and sits with the credit officer and tells him/her how much they are requesting and what the items they are pledging are. From there, it is up to the credit officer to determine if the value of the proposed items is enough. My impression from conversations that I have had with credit officers and branch accountants is that the worth of the collateral is usually equal to the amount of the loan. If the borrower defaults and the sale of the items does not cover the outstanding balance than it is up to the group members to cover the balance.
Hope that answers the questions!
I am currently pondering is the extension to all of this – Which is that since the microfinance institution that I work with does group loans primarily, the contracts they sign are essentially with groups rather than individuals. Since Pearl earns 10% interest (or 2.5% monthly) on any given loan, and most groups repay the full amount one way or another, Pearl seems in a position to make quite a bit of money off of their loans. It seems like an ugly, although perhaps necessary, set up for the borrowers. They have to cover all the loss but they receive no gain for the excellent credit rating that most of them as groups have.
In many of the business profiles that Pearl posts, we talk about matoke. The green bannana bunches shown here are the main ingredient in this wonderful local dish!
Tarantula, Dog, or Duck Fetus, srey Teresa (sister Teresa in Cambodian)?
Being a Kiva Fellow in Southeast Asia you meet many small business owners. Some of these business owners sell what I like to call “culinary adventures”. So as not to offend people, you get a chance to try many of the dishes. Over the course of my seven months, I’ve discovered after a while to stop asking what it is, and just try it. Some have left their impressions on me though, and I thought I’d share them with you.
Let’s see, in Cambodia you have fried tarantula and various bugs such as beetle, cricket, and bee larva. The most delicious and famous ones come from the Kampong Cham region, northeast of Phnom Penh. You can get them on the side of the road as you motorbike by, or at any local street market.
"love, love, love me some good tarantula!"
You also have dog. This dish was bought for me by Rong, a Cambodian friend. He told me, “You have to try it since you don’t have it in the US, and after you try it, you must text me what you think.” I was told that dog is a meat that makes you warm. It is eaten mainly by men and coupled with beer. The best dog restaurant in Phnom Penh is just east of the Boung Keng Kong Market.
And I did have a beer or two with it. It just went down better with a beer. My stomach is still upset just thinking about it.
You also have boiled duck fetus eggs called “pong tea koun”. Fortunately, I only had one opportunity to eat it, and my Cambodian friends at CREDIT-MFI let me slide on that one as I watched them chow-down. As they pulled the fetus from its shell, I could see the partially formed baby duck complete with head, neck, beak, and wings. It was explained to me that you can buy “pong tea koun” at different fetus stages, a few days old to 2-weeks old. It all depends on your taste. It was the nastiest looking thing I had ever seen someone eat. It is said that they give you strength and energy.
Now, Khmer and Filipino cuisines do not have much in common, but they do seem to share the same love for boiled duck fetus eggs. In Tagalog, it is called “balut”, and unfortunately, this time my Filipino friends at ASKI-MFI would not take, “No” for an answer.
Now, if you eat “balut” like a lady, you don’t pull the embryo out of the shell, you eat it bit by bit with a little spoon so you don’t have to actually see what you are eating. Lucky for me, the ladies at ASKI-MFI eat “balut” like men which is what they required of me. To eat “balut” like a man, you pull the entire fetus out of its shell in order to see the almost formed fetus duck body . It usually takes about 2-3 bites to completely eat.
Balut, see the fetus duck head on the right?
Needless to say my “culinary adventures” continue. I will be in Cabanatuan City, Philippines with ASKI-MFI for the next three months bringing you Kiva client stories and blogs. Hope you enjoy them, I am off to lunch now.
Hmmmmm, should I have goat or more balut?
Illegal Immigration-the view from Nimasac Guatemala
It’s almost impossible to find a family in this little town of Nimasac (in the western highlands of Guatemala) who has not had a son or husband go to the U.S. to find work.
Boys often leave when they are teenagers (16 or so) and take the perilous route to the U.S. through Mexico, by enlisting the services of a “coyote” (immigrant smuggler)—which is a very risky proposition. If they do make it to the U.S. alive, they arrive in large cities (Houston and New York seem to be the favorites here) where they connect with acquaintances or friends who are already there. Many leave wives and young children behind. Many stay for years before they return……..some never come back to Guatemala.
In the U.S. they find work in restaurants, construction, landscaping and, most of them, faithfully send money back to their families in Nimasac twice a month. It is hard to imagine the impact of these bi-monthly “remesas” (remittances) on the families and the local economy. In fact, annual remittances from the U.S. to Guatemala are the second biggest driver in Guatemala’s economy—second only to exports, totaling $ 4.3 billion in 2008 (Sources: MIF, IMF, US Census International DataBase, Latin America Monitor).
You can look around this village and clearly distinguish between the houses that were built with American money and those that were built with Guatemalan money. (see photos below)
Families with sons or husbands in the U.S. can often afford to feed and clothe their families, send their children to school, have cement block homes with running water and maybe even have electricity. It is estimated that 43 percent of Guatemalan households receiving remittances have been lifted out of extreme poverty. (Source: Economic Commission for Latin America and the Caribbean (ECLAC)). So, these families are still poor (especially by American standards) but no longer among the poorest of the poor.
Remittances are projected to decline by 8% or more in 2009. In data just released by Banco de Guatemala, remittances for the first two months of 2009 are down 9.6 % compared to 2008. The impact of the decrease in remittances is profound and widespread and likely to get worse. Construction on many homes has simply “stopped” (putting those who were building the house out of work). Families can no longer afford to buy things, significantly impacting demand across the board, and especially the weaving, sewing and shoemaking cottage industries in Nimasac.
One Kiva borrower I spoke with said she used to have 35 individuals sewing/making parts for her shoes and now she is down to 15, with prospects looming of further declines. (She used her Kiva loan to pay her employees for work produced, but not yet sold due to lack of demand.) Another Kiva borrower had originally taken out a loan for leather and other shoe making materials, but the market for his product has all but disappeared. So he bought a loom instead—hoping the market for traditional fabrics “cortes” is more dependable. This is a young, industrious, positive young man with a wife and a toddler to provide for. But, demand is down, across the board, in almost every area of the economy here.
On one hand, I understand the associated “hidden” costs of illegal immigration in the U.S. I know that some illegal immigrants do not pay taxes and often times avail themselves of the education and medical care and, with the economic downturn, may be taking jobs from Americans who need the work. I also realize that, since some illegal immigrants are paid under the table and do not pay into Medicare or social security or income tax, we all “pay the price” for their use of our services.
On the other hand, I can also understand the desire of these young men to provide for their families, to improve their lives by immigrating to the U.S. (legally or illegally) where they can find jobs and opportunity. It reminds me of the situation that Jean Valjean finds himself in Les Miserables, when he steals a loaf of bread to feed his daughter.
As with most things, there are definitely several dimensions to this illegal immigration issue. And it is apparent from the Guatemalan side, that many families who had been able to escape extreme poverty are about to be thrust right back into it as remittances from the U.S. continue to decline. And, in the absence of “demand” for products and services, the ability for micro credit to make a meaningful difference in the lives of these people may be compromised.
built with $$$
built with quetzales
