Archive for April, 2009
Shhh! Don’t tell Starbucks.
There exists a daily beverage that is more omnipresent and culturally dominant than Seattle’s most famous export. It’s a tea known as tereré and (hooray for American marketing) Paraguayans literally do not leave home without it.
Tereré is a loose-leaf tea that is always served cold. It involves no foams, whips, or syrups, and there’s definitely no decaf. Just mate tea, ice water, and, if you like, a mix of mint and lemongrass. As simple as it may sound, bringing these ingredients together is much harder than saying “grande coffee, no room” to the barista. Prepare tereré correctly (sift out the tea dust, crush the herbs to bring out their flavor, tilt the cup at the proper angle when you first pour your water) and you have yourself an incredibly refreshing, slightly stimulating, antidote to Paraguay’s absurd heat. Fail to do these things (or, alternatively, be a Kiva Fellow named Nick Cain) and you’ve got yourself a slightly bitter, mini-stew of floating tea. Like a good cappuccino, to get it right you’ve gotta finesse it.
But once you’ve prepared a good batch, you’re in business for at least a couple hours, and Paraguayans take full advantage of tereré’s staying power. Men, women, teenagers, police officers, grocery store clerks, construction workers, loan officers—everyone carries around a thermos (térmos) full of ice water and a tereré cup (guampa) as they go about their day.
Tea drinking authorities.
Thus, the tea has been ubiquitous in my daily routine as a Kiva Fellow. When I hop on a bus to head to one of Fundación Paraguaya’s branch offices, the driver always has his thermos by his side. Some buses even come equipped with their very own tea caddy: a person whose sole duty is to pass the driver his tereré whenever he requests it. By the time I arrive at the office and shuffle into the kitchen to prepare my morning Nescafe (I know, I know), one or two loan officers are already there crushing herbs and cracking ice cubes. And, of course, as is the Paraguayan custom, when I arrive at the home of a Kiva borrower for an interview I am always directed to take a seat in the shade and have a sip of tea (a custom that led to one particularly memorable moment).
Tea Caddy on Linea 11
When you’re handed a cup of tereré, it’s easy to see that all guampas are not created equal: some are made of wood, some of stainless steel, and others of the more traditional ox horn. But where they really diverge is in their decoration. Many are wrapped in leather, with the owner’s name or business emblem etched into the side. Just as common are those that come adorned with the logo of the owner’s favorite soccer club (also memorable: my soccer allegiance faux pas).
I’d guess that at least 90% of Paraguayans over the age of 14 own a guampa and térmos. Someone has to produce and sell them all, right? Hugo Ruiz, Cipriano Machuca, Graciella Grosella, and Mario Gomez are just some of the many entrepreneurs who have invested Kiva capital in businesses that sell a wide variety of guampas and térmos. Last week I spent some time with Alejandra Alvarez, a mother and an entrepreneur who manages her own business producing, decorating, and distributing guampas and térmos. Since learning the trade more than seven years ago, Alejandra’s business has grown steadily. Her profits helped her build a new, sturdier home on her property, and she currently employs five workers, one of whom is her son Cristian. On the day of my visit, Alejandra’s team was putting the finishing touches on a batch of Mother’s Day guampas so that one of her employees could load them up and deliver them to Ciudad Del Este, a town six hours to the east of Asunción. You can see more of my visit with Alejandra, as well as the guampas, in the video below:
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Nick Cain is in his 11th week as a Kiva Fellow working with Fundación Paraguaya. Based out of Asunción, he travels around the country meeting Kiva borrowers and sharing their stories. Feel free to send questions, comments, or requests for future blog topics to nick.cain@fellows.kiva.org.
Volley Ball, Skirts and Celebration!
As if volleyball and soccer were not challenging enough, imagine playing these sports in long skirts, dress shoes and traditional hats that barely stay on your head in the slightest wind. I have been to and played in sports tournaments my entire life, but until last week I had never experienced a tournament like this!
As a Kiva Fellow working with the Microfinance Institution (MFI), Manuela Ramos, I have the privilege of attending not only community bank meetings, where groups of women come together to take out small loans, but also community events that are meant to empower women, spread the word about Peru’s women’s rights movement, in which Manuela Ramos plays a large role, and show the women a great time! Every year, Manuela Ramos puts on as many as eight events in the different zones where they work; sometimes these events afford the women entrepreneurs the opportunity to sell their goods, sometimes they are educational and teach the women how to effectively run their small businesses, and sometimes they involve the playing of sports. Above all, these events encourage camaraderie and self-esteem amongst the women.
The morning started early, with a 4 am wake up call followed by a three-hour, multi bus journey to Lampa, Peru where ten loan officers and I fumbled and laughed our way through the set up of the volley ball court and soccer nets. The fact that I’m about five inches taller than the next tallest woman made me very popular when it came to propping up tents and hanging signs! The women entrepreneurs began to arrive around 8 am and by 9:30 the ceremony began. Dressed in their team shirts and proudly holding their banners, which displayed their community bank names, the women lined up in rows. With a borrowed microphone, the loan officers of Manuela Ramos recognized individuals who had demonstrated excellence amongst their fellow bank members. After singing the Peruvian national anthem, the women and the loan officers ran around the paved court and the games began!
As the community banks participated in the sports, the other women watched, cheered, and took advantage of the local hospital offering of free HIV tests and $.50 women exams, a service that Manuela Ramos set up for the community. After approximately four hours of games, the day concluded around 2 pm, with a large lunch of chicken and potatoes, an Andean favorite, and a closing ceremony where the loan officers played the Manuela Ramos theme song, which is reminiscent of a 1992 Celine Dion hit. The women seemed to truly enjoy themselves, and the event undoubtedly fostered camaraderie among the women in the community banks and made women in the area, who stopped to watch, interested in being a part of Manuela Ramos and all the fun!
Emily Sweeney is a Kiva Fellow, living in Puno, Peru. She has been working with the Microfinance Institution, Manuela Ramos, for three months.
Won’t You Be My Neighbor…And Give Me a Good Credit Rating
"Tea"
Over tiny cups of scalding, frothy sugar water that Senegalese people call “tea,” I have a chance daily to sit around with my fellow MFI employees and talk microfinance. The other day, I was sipping my tea with Moussa, a loan officer, and he told me about how credit is established in Senegal. Now, in America, a credit rating is a logical thing, based on the percent of your total credit you’re using, the type, duration and size of your credits, and your delinquent payments. In Senegal, it’s done a bit differently…
Kiva Fellow: So, Moussa, in America, every person has a credit rating, which is based on a formula and makes it easy to estimate how likely it is that they will repay a loan. Does that kind of thing exist here?
Moussa: (Laughing.) No…Your country is a lot more advanced than ours. We don’t have the ability to do that kind of thing here.
KF: Ok, so how do you decide whether or not to give someone a loan? I know the person has to have a savings account with IMCEC, and they have to provide certain things as collateral or have another person to pledge to back them up if they don’t repay. But is there anything that helps establish credit-worthiness? [This conversation was in French, and I’m being very kind to myself in the eloquence of my translations. I sound a lot more like a 5-year-old.]
Moussa: Well, first of all, we can look at their history with IMCEC. Sometimes we start by giving a smaller loan, and if they repay it well, their second and third loans can be larger. Then we look at the business plan to see if it looks profitable. But, we also talk to people who know the client to see what they have to say.
Moussa, IMCEC Loan Officer, with a Kiva Borrower
KF: You mean, you go to their neighbor’s house and ask them if the client is a good guy?
Moussa: Yeah, basically. I mean, we wait until the client isn’t around before we talk about him.
KF: That’s nice of you. And what if the neighbor just happens not to like the guy? What if the neighbor is actually the one who isn’t a good guy?
Moussa: Yeah, that can happen. Which is why we talk to more than one person. For example, say there is a store in the neighborhood where everyone goes to buy basic items like soap and sugar. The owner of that store usually sells things on credit at the end of the month when people are running out of money. We can ask the store owner for some information on the client – does he repay these purchases on time? We also try to have at least one person on the Loan Committee from each neighborhood to get another perspective on the clients.
KF: Wow. So it really pays to be nice to your neighbors! And you loan officers really need to know everyone in town!
Moussa: Yep!
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It’s pretty incredible to me that the system works this way, or, more specifically, that the system actually does seem to work this way. With a write-off ratio of less than 1% of all loans, IMCEC seems to be doing pretty well. Maybe American banks should have considered the “neighborhood” aspect of credit – for all its imperfections, the Senegalese way of evaluating creditworthiness might provide a more meaningful and accurate perspective than the impartial, formulaic system we use.
Furthermore, in conclusion, next time you live in Thies, Senegal, and you feel tempted to throw a wild party and annoy all your neighbors with the noise, think twice. Afterwards, you may mysteriously be rejected for every microloan you apply for.
That is, of course, unless you invite them all to your party and give them free food and drink. Just imagine how the credit will flow then!
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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!
Fellow-vision
I think that most Kiva Fellows will agree that anytime we meet with Kiva Entrepreneurs we are confronted with a gauntlet of emotions from happy to sad, from inspired to depressed, from energized to drained. While for the most part, for me anyway, the experience tilts towards the positive side of things you never know who or what you are going to run into when you hop on the back of your credit officer’s moto.
I spent the beginning part of this week meeting with twenty-five Kiva Entrepreneurs and felt practically every emotion I can think of. While my first idea for this post was to tell you how I felt meeting these people I decided that each one of these experiences could mean something totally different to every person. I am going to try to introduce you to three of the individuals I visited with via a brief intro and a short video so you can meet them with as little filtering and subjectivity as possible.
In almost every video I ask them if they have any hopes or dreams for the their family’s future. Most of the answers are fairly ordinary; increase my sales, change business, fix or build a new home, but even these answers represent a desire to overcome significant obstacles to better the lives of them and their children.
Meet Ny Sokythea:
Ny Sokuthea and her husband expanded their fish selling business with their Kiva loan. With the money from the loan Ny Sokuthea went to several local fishermen and gave them money up front in return for the promise that they would sell exclusively to her and at a price they determined in advance. This brilliant piece of negotiating has helped her stabilize her costs while ensuring that she has a product to take to the market everyday. After only a few weeks she was able to earn about $5 in extra profit per day. They also farm a small plot of rice for about 6 months out of the year for extra income. Ny and her husband have three children, all daughters, ages five, thirteen and fifteen. They all attend school and Ny says that they all study both Khmer and English.
In the video you can see she is a very funny and playful person, when I asked her about how she would want to grow her business she told me that she wanted a car so she could fill it with fish to take to the market, a joke, maybe. When I asked her about her dreams about her future she told me with a mischievous smile on her face that she wanted to be a “Ms. Excellency” or a high official in the national government.
Meet Lia Lun:
When I went to visit Lia Lun I was greeted with extreme hospitality despite very difficult circumstances for her. The night before I came to her house her 40-year-old next-door neighbor had passed away in his sleep and she was busy making preparations for his funeral. When I offered to come back another day she flatly refused and pulled up a chair and table for us to sit at. While what I was there for was of much less importance than what was going on around me I felt it would be rude to not accept her hospitality and so we sat and spoke for a few minutes.
Both Lia and her husband have been creating decorative Khmer wood pieces since the early eighties (see video for example of their work). They have three children, two sons and one daughter. They have two grandchildren as well with three more on the way as their daughter in law is expecting triplets next month.
As I sat and spoke with Lia, her husband and other men from the neighborhood were building the coffin only a few yards away while her neighbor lay on a table under a tree just beyond them. The banging you hear in the background of the video was all of this going on.
Meet Rom Chhoeuy:
Rom Chhoeuy has been selling fish and traditional fish paste for about seven years. Her normal routine is to go to the local fishermen every morning and buy some of their catch and take her purchase to the local market to resell. She makes a good living of $7 a day and is very happy with how things are going.
Her husband has been repairing machinery for two years and makes about $5 a day. Before he had his current job he was a moto taxi driver for six years. They have two children, one son aged 6 and one daughter aged 8. Both of her children attend the local school.
The entire time I was completing the interview her kids were waving and smiling at me. See the video of my final question to see what I mean.
Meeting each one of these women and hearing about how they were using their loans was an amazing experience and I hope I was able to share that in some small way.
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Drew Loizeaux is currently serving as a Kiva Fellow with Hattha Kaksekar Limited (HKL) in Phnom Penh, Cambodia.
U.S. Microfinance 101
U.S. Microfinance 101
I hear the phrase U.S. microfinance and I perk up- I’m not alone. Last week I was at a microfinance 101 meeting in New York City. The event was catered to a group of young professionals that were interested in getting involved, somehow, in U.S. microfinance. Someone asked a question about repayment systems for U.S. microloans, wondering if borrowers come into the office to make repayments or do the loan officers go “into the field” to collect? The end goal with domestic microfinance is the same as it is internationally; empower individuals to create prosperity through entrepreneurship.
To answer her question: on occasion a borrower may come into the office to drop off their payment, or a loan consultant will do a site visit. Generally speaking in the U.S. the repayment system is electronic, a monthly debit from the borrowers bank account. This sounds less compelling than the vision of a loan officer riding the entire day on a motorcycle to a rural village to collect a five dollar repayment from a loan for a cow. But, not to worry there are definitely other aspects of appeal for domestic microfinance.
Entrepreneurs are turned away from traditional U.S. banks for many reasons, maybe because of a low credit score or no score at all. They may not have a solid business plan or have not yet acquired the appropriate permits and licenses. In many cases though, the estimated $30 million unbanked Americans simply aren’t served or don’t have access to traditional banking. Many entrepreneurs just need a few tools to help them create prosperity- microfinance institutions can provide that.
Credit scores were discussed at the microfinance meeting last week. One person pointed out that a large American bank just announced that they weren’t loaning to anyone with a credit score below 800, in other words: they aren’t lending. Microfinance institutions are lending, the largest U.S. microlender requires a credit score of just 575. U.S. microfinance institutions make loans to individuals ranging from $500- $50,000. They offer loans and other products such as financial literacy to individuals from all walks of life.
It’s very common in the U.S. to have a client walk into a microfinance institution with a bag full of tiny pieces of paper and request a loan. Traditional banks would quickly turn the client away. At an MFI, a loan consultant will sit down and go through each piece of paper to create a cash flow, help create a business plan and refer the entrepreneur to other agencies to get appropriate licensing. An MFI loan consultant will do everything they can to give the borrower the credit they need.
Domestic microfinance is in a position to begin scaling up to meet the needs of more low-medium income borrowers. Individuals from all walks of life can find themselves in need of the kinds of services a U.S. MFI can offer. Services like $500 credit builder loans, or help with creating a business plan, larger loans for business capital and inventory, and other types of financial literacy services. Microfinance provides individuals with the power to be self-sufficient and to create a legacy and life of prosperity. Domestic microfinance is playing a part in fulfilling this dream for entrepreneurs from coast-to-coast.
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Erica Dorn is a Kiva Fellow researching U.S. microfinance in New York City.
Best for Bolivia
Bolivia’s political conflict, antics and struggle are very much a part of the day to day. But somehow, I haven’t really felt it. I know that in September of 2008 the situation was much more tense. Violence was on the rise. The US Ambassador was expelled. A potential civil war between the highly indigenous west supporting Evo Morales and the more politically conservative, often land-owning east seeking autonomy? Throw in the simplifying and mystifying fact that in Latin America, right now, you are with Chavez or you are with the US, and I am left constantly talking about Evo’s policies and in equal portion, American sins.
Chavez and Evo
This was true this week when I met Don Lorenzo, who with a loan in his wife’s name, makes cholita hats. He asks me within the first five minutes a simple question: do you believe in the indigenous people of Bolivia? Simple. Yes.
Don Lorenzo and His Hats
So why does my government choose to burn down the coca fields, not only an ancient custom but also a competitive product on the capitalist global stage? I’m well versed in this- first, Don Lorenzo, I disagree with the US government’s war on drugs. But I can help explain some of the complex internal politics that have led to our obsession with curbing supply, and often ignoring demand. Second, we should make a distinction between the government of a country and the people of a country. I will do the same in the way I view the Bolivians.
An error. NO! Don Lorenzo sees himself perfectly reflected in his government. Evo is the face of the people. He understands their culture, their dreams, their hopes. He is one of us. Don Lorenzo says he has been molding, steaming, cutting and selling these hats, an image of indigenous Bolivia for his whole life, and Evo makes him even prouder every time his wife dresses in her pollera and sombrero and hits the streets to sell these beautiful products. I am Bolivia, says Don Lorenzo. So, by extension, Sierra is the US. The US government that is. Will it work to explain that electing an African American in some ways carries the same meaning for us as electing Evo was for them? I hesitate to call Obama an indigenous leader, but will “community organizer” transfer?
Bolivian Congressional Building
Probably not. I steer clear of the conversation, sweeping a wide arch that includes questions about where felt comes from and how his father learned the trade, but inevitably land roughly on, “so you are in support of Evo?”. “Are you?” he returns. Flat. Well. I don’t know. Like most places, the truth about what’s best and what’s worst lies somewhere in the forgotten in-between. Do I think Evo is good for Bolivia?
Several little points, primarily as anecdotes, come to mind. First, every person over the age of 65 gets 200 Bolivianos a month. This is practically nothing, but it feels like something. It feels like the government cares and that’s not nothing. He is fighting for literacy. Signs everywhere say, “Un Pais Libre de Analfabetismo”, a country free of illiteracy. Good effort, but I know several illiterate people. Still, they can take classes for free…if only they had the time. A rebirth of kids speaking Aymara. I love the thought that languages can be preserved, and something in me lights up when I hear Atajo’s lead singer rapping in Ayamara, even if it’s against the Yankees stealing his identity. More people than ever are employed by city governments to clean up and preserve immaculate plazas. And aren’t they pretty? Makes me proud to be here, like I know a secret- Bolivia is really beautiful.
San Pedro Plaza
But there are several little things that worry me. First, that he keeps changing the constitution so he run again. And then maybe again and again. Hunger strikes, Evo sitting on his floor munching coca, are an effective way to get congress to pass his measures. Corruption hard to measure but still a real force.
And the grey area. A perfect example is the fractura system. Each person in Bolivia has a section of their salary withheld and they can only use it in places that offer fractura. Or a receipt. To be able to offer a receipt, and thus attract customers, the business must both register with the government and pay taxes. This encourages the formal sector, and raises money for the state. A good thing. Except its hard to offer fractura, and most small businesses can’t. And it hurts. Not the woman on the corner selling just a few dozen oranges a day, but it does hurt a Kiva client who dries and packages chili peppers and wants to start selling to incorporated supermarkets. Plus, it seems to infringe a bit on one’s liberties to be told where they can shop. But oops, that’s my American-ness again.
Kiva Entrepreneur's Chili Peppers
And really, how does the political situation here affect business? For Don Lorenzo, his business is, in part, a political expression. Still there aren’t that many jobs, and people become business owners not because they want to, but because they have few options. The market appears saturated, but how could I possibly measure that with my limited tools- a camera and a notepad? I found out partway through my visit that his wife, Mercedes wasn’t at home because she was in a big march down the main street expressing general support for Evo. I asked how often she does this, and was surprised with the answer. Whenever her association requires.
Most small businesses like Don Lorenzo and Mercedes’ are part of a neighborhood association, that pools money to keep the street they sell on safe, and mostly clean. The have meetings once a month and are organized. Its one of the parts I like most about small businesses here. But whenever the director (a member of Evo’s MAS party, always) says they have to march, or blockade, they pick up and do it. If they don’t, the association issues a fine -they can’t sell their products for 1-3 days. Political participation in support of Evo is thus compulsory. Good thing Don Lorenzo and Mercedes believe in it. Otherwise this would be corruption, and an infringement on individuality. But oops, that’s my American-ness again.
After saying goodbye, and eliciting a few friendly laughs with my attempt to bid farewell in Aymara, I was in a taxi on the way to visit a friend when we bumped into Mercedes’ march. It was big. Lots of color and guns. A zebra is knocked down by the crowd. People dressed as zebras direct traffic in La Paz with happy faces and fancy dances. This is Evo’s attempt to “re-educate” people about traffic manners, and its harder to fight a zebra than a police officer. I open the door of a cab to help the zebra up when a riot cop sprays the mob with tear gas.
Zebra hard at work
Burn. My nostrils afire, my eyes burned shut. Have I really just been tear-gassed in La Paz? Where did the plaza with the flowers go, and my favorite egg lady? Where are the tuba players and the children with the icecream? A different world descends and my nearly blind taxi driver drops me above the blockade, near a gorgeous church where a friend is waiting. I’ve been told cigarette smoke binds to tear gas and helps. A non-smoker, I chock back two, trying to blow the smoke into my own eyes and sit it out. I was 100% fine 20 minutes later. The zebra was fine.
Now amidst Evo’s crys for international investigation of a plot to assassinate him, I find myself wondering still, what is best? The only conclusion that I can come to is, like the surreal moment when I’m helping a man dressed as a zebra move out of the street of half-hearted protestors, facing a cop in full riot gear spraying gas generally through a crowd, I am out of my element. I am not in a position to evaluate what is best for Bolivia.
Although, I did like sharing in Don Lorenzo’s pride, and will forever remember his smile more vividly than a blurry taxi ride.
Don Lorenzo and Sierra
Sierra Visher is a Kiva Fellow (KF6) from California on her second placement in Bolivia with Emprender. All funding loans from Emprender can be found here. Sierra can be reached at svisher@gmail.com, and enjoys hearing from Kiva lenders!
Adios Guatemala
Today is my last day as a Kiva Fellow working in Guatemala City. I will admit that in recent weeks my mind has been wandering to the luxuries of home: ethnic food, safe and timely public transportation, dishwashers, smog laws, etc… But as always, when leaving a new “home”, I know that I will miss the experiences and friendships that I have been lucky enough to experience while here.
As one of my fellow Kiva Fellows pointed out in an earlier post, we fellows tend to receive credit for the support that all of you lenders are really giving. I wish I could offer you one of the glasses of Coke or Fanta that I’ve been given, perhaps sit you down with a basket of fresh tortillas, bring out a photo album and begin to show you the true gratitude that I was shown by countless Kiva borrowers. Earlier this week I re-visited a client that I had already met a few times. As I was leaving she shouted after me “make sure to tell all your friends at Kiva thank you!” What she meant by “friends” was all of the lenders who had chosen to believe in her.
The field partner that I have spent the past 3 months with is called FAPE, a small MFI with over 25 years in the industry. In addition to their core business of providing small loans to women from mostly rural area, FAPE stays true to their deep social mission of improving the lives of Guatemalans – specifically those with little or no access to financial services.
FAPE Staff - When else will I be taller than most of my co-workers?!?
One of the pilot projects they have begun is a training course delivered to women at the Santa Teresa Women’s Prison. While the project is only one very small piece of the incredible work that FAPE does, I thought it would be interesting to share one of the stories that was shared with me. Here is a short video of a Kiva borrower who lives is a prison in Guatemala City:
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In The Field
Andrea Bouch just finished her first placement in Guatemala. She will be returning home to San Francisco (tomorrow!!!) where she will continue working as a Kiva Fellow.
Rice Accounting 101 in Rural Cambodia
Rice plants nearly ready for harvest
Sophisticated income statements and balance sheets are the standard tools used by global corporates to demonstrate their year-over-year growth and net change in assets and liabilities. I saw my fair share of SEC sanctioned 10K annual and 10Q quarterly financial reports while working in corporate banking in New York City, but from where I stand now as a Kiva Fellow in my third month in the field, these accounting instruments are of no use to Kiva entrepreneurs in rural Cambodia, many of whom cannot read or write.
When I interview Kiva borrowers in the agriculture sector (which fits the description for the majority of AMK’s clients in Cambodia), I try to get a sense of how their crops are doing and if they are satisfied with the most recent harvest. Some borrowers cultivate rice solely for personal consumption while others grow to sell. When entrepreneurs have multiple businesses (which many of them do), the decision to sell or keep the rice they grow is often a function of the success of their harvest. If a farmer lives near a good irrigation source they can harvest rice twice a year during both the rainy and the dry season, but otherwise rainy season is the only option since rice cultivation is heavily dependent on the weather.
My enthusiastic instructor
Most farmers I speak with can quickly tell me the market price they can get for one kilogram of rice: typically about 800 Riel (20 cents USD). When I ask borrowers how many kilograms of rice they recently harvested, however, I get a variety of answers, and seldom are they numerical. The general response trend is that year over year growth is described in terms of “better or worse.” While visiting Svay Village in the Kandal Province of Cambodia yesterday I encountered the most enduring and perhaps practical explanation yet of how one entrepreneur measures her yearly “profit.” Check out this video to see my rice accounting 101 tutorial:
Can a line drawn semi annually inside a giant bin marking the height of a rice harvest really provide accurate data? For a hardworking family living in the in Svay Village of rural Cambodia the answer is yes, accurate enough. If this seasons harvest exceeds last seasons harvest and last seasons harvest was enough to feed the family, then some of the excess yield can be sold to bring in additional income for the family.
It was a humbling but wonderful afternoon
Katie Davis is currently serving as a Kiva Fellow (KF7) at Angkor Microfinance Kampuchea (AMK) based in Phnom Penh, Cambodia.
It’s Time to Invest in Stock! Livestock, That is.
As a Kiva fellow, one of my jobs is to attend the various centers during their bimonthly meetings. At the meetings, I have found a routine: watch the groups gather and prepare their money to turn in, sing the GHAPE anthem, discuss upcoming events, and then while the loan officer works out money logistics, I interview Kiva borrowers. As you can see from the video, the other day was slightly different.
After the meeting, all the members and staff stayed in the center room and two members brought in two piglets. It was quite the spectacle; well, I think I was the only one who thought so. Many of the borrowers at GHAPE deal with agriculture from farming vegetables to livestock, and with some training, raising and breeding pigs is a great way to increase one’s capital for both the short and long term.
When a new center begins, GHAPE gives the center capital to purchase one female piglet. The borrowers of that center then discuss which breed to buy and who gets to receive the first piglet. The guidelines are that the borrower must be a female and have a suitable pig fence. In addition, the chosen borrower must continue the cycle of “pass on a gift and be donor” by bringing in two female piglets after the given one has had a farrow (a liter of piglets) to give to two other GHAPE female clients. This ‘gift that keeps on giving’ (literally) is a way for GHAPE to encourage its female borrowers to invest some time and money into an area of farming that really assists in saving money and provides free manure for their farms.
While raising and selling pigs is a good investment in Cameroon, training is necessary and the process is a bit more complex than it looks. Luckily, GHAPE conducts workshops on pig farming twice a year and asks the experts to share their advice with new or potential pig farmers. For instance, there are several breeds of pigs and each has advantages and disadvantages; so when choosing a breed, one must consider factors, like which has a better resistance to disease, which ones grows faster, etc. At the workshop, potential pig farmers also learn how to build a good pig fence and how to keep its area clean.
Some of you may ask, “Why pigs?” One of the main reasons is that they can breed twice a year because their gestation period is “3 months, 3 weeks and 3 days,” and pigs eat less feed but provide more meat compared to other animals, like the bovine clan. However, don’t be fooled: there are a good amount of challenges a farmer takes. A year or so ago, the area of Bamenda was hit with Swine Fever, which is also known as Hog Cholera and Pig Plague. This air-born disease is highly contagious and the Cameroon government is still attempting to find a solution, like a vaccine, to prevent such a damaging spread like last year’s. The only recommendation they have is to keep the pig area clean and away from other pigs.
Another challenge of owning pigs is the expenses: at times, the cost of pig feed spikes in the market, making it harder for farmers to justify owning livestock. In order to combat the prices, a farmer can mix feed with their surplus from the farm, like yams or corn, but that can only be done every so often. Another major expense is buying material and paying a carpenter for the pig fence. So when given a piglet from the GHAPE center, this cycle encourages clients to take up pig farming but with caution.
After learning so much about this area of farming, I am quite impressed with its complexities and how helpful it is to own a pig (if executed correctly). To me, it seems like the Cameroonian version of the stock market: with the right education and instruction, the advantages of investing for the long-term will mostly likely outweigh the risk factors of the short-term. And while not everyone wants to own (live)stock, it is always something to consider for the future when the timing is right. In fact, GHAPE will not allow a borrower to receive a piglet until she has attended their workshop. In the video posted here, because there were no borrowers ready to receive a piglet, they sold the piglets to clients who already have received a pig in the past.
Lake Titicaca and the Floating Islands
After almost two months living in Puno, Peru and after a few embarrassing moments when tourists I encountered asked me for advice about visiting Lake Titicaca and I had to sheepishly admit that I hadn’t yet embarked, I decided it was time to make the trip. In my defense, I had been waiting for the rainy season to pass and for someone to go with. Luckily, last weekend both my prerequisites were met.
Through a Kiva connection, I met a fellow microfinance worker, Zoe, who was conducting surveys on microfinance interest rates in Puno. In the good and admittedly much needed company of a fellow expat, I set out at 6 am on a tour boat for the floating islands of Los Uros. Although the translation of the name obviously implies that the islands are floating in the lake, I thought that this was surely just an expression, or perhaps a mistranslation; I was wrong!
Thousands of years ago, out of necessity, the Uros tribe began creating islands off the coast of Puno. The people of Los Uros create the islands using land that they cut away from the shore of the mainland. In order to maintain the islands, layers of reeds must constantly be added on top of those that are beginning to rot. Using large stakes, the islands are anchored in the lake and in order to move the islands the inhabitants simply need to remove the stakes and push the islands with their reed boats. Originally, the idea of the floating island was devised as a defense mechanism against the Aymara tribe, and later against the Incas. Today, the islands are safe and are rarely moved to new locations along the lake. Although many of the inhabitants of Los Uros have moved to the mainland, about 70 of these islands remain inhabited, with each community consisting of between four and 16 families. Although the islands themselves are small, the community of islands makes up a rather large population of people who work together in business and culture. Children travel to nearby islands where teachers provide both primary and secondary education and the island’s inhabitants work with Puno’s tour agencies to ensure that every island benefits equally from the prominent tourist industry.
Docking at one of the islands and being cheerily greeted in the local language of Aymara, Zoe and I explored the approximately 1,000 square foot island, which was just a bit larger than my old apartment in San Francisco. Perhaps even more surprising than the fact that these islands actually float, was seeing the juxtaposition of modern technology and an ancient culture. Looking up at the metallic structures on top of each of the nine thatched roofs I thought, “these can’t be what I think they are”, but again, I was wrong (an ongoing theme!). The tour guide explained that almost all the islands of Los Uros are powered using solar technology. Adding to the islands “green theme”, the guide also informed us that the boats these communities use to travel from island to island are made using used plastic water bottles, which are placed inside the woven reeds and act as floatation devices. As I watched a small girl in the local dress of a top hat and large skirt pop in a CD for us visitors to enjoy, I marveled at the reaches of globalization.
After returning to the mainland and going to the office on Monday morning, I let the loan officers of the Microfinance Institution (MFI), Manuela Ramos, where I’ve been volunteering, know that I finally made it out on the lake. They asked me if I bought any artesian arts and crafts and informed me that many of these artesian workers are entrepreneurs of Manuela Ramos and are part of community banks that take out loans in order to buy supplies in bulk in Puno and increase their profits. After seeing the solar panels and the impressive organization of the community of islands, I wasn’t surprised and was certainly pleased that microfinance too had found a way to merge with the culture of Los Uros.
I am living in Kisumu, Kenya
I am living in Kisumu, Kenya. Here is a picture of the street where I volunteer, in the Nyalenda slum.
Walking around the slum, one quickly comes across evidence of the post election violence. Burned buildings are common. As are random herds of goats.
White people in Kisumu are usually in self-contained SUVs. Not too many ever enter the Nyalenda slum. As a result, as I walk, I am usually chased by children.
If I stay in one place for too long, they gather to stare.
In the slum, you find many teenage girls. Their stories show a lot of common themes.
I am 20 years old. My parents passed away when I was 14. A lack of school fees made me leave school. We were left 10 children. Everyone searched for places to stay but I was left alone and went to be a street girl. A guy hired me as a maid but forced me to have sex. Within one month he raped me and I was pregnant. I went to the Kenyan police and they did not take any action about that case. They wanted money but I didn’t have even a single cent to give them. I became a mother of a child but there was no job or anything to do. I wake up early in the morning to wash clothes for people. They only give me 50 shillings (*equivalent of less than $1USD) in order to get food to eat with my child. Without washing clothes, we go to sleep hungry. If I can get someone to take care of me and return me back to school, then I can be proud and be happy as some people are. Maybe my life can change and I can be someone different.
I’m a girl of age 20 years. I dropped out of school in 2005 because I did not have money to continue my education. I have been staying at home doing nothing. I have no money to start a business. I have no knowledge of anything. I tried to convince my father to look for money to take me to high school but he did not. I have been walking day and night to look for employment even as a housemaid but the salary is as low as 100 shillings a month (*$1.31 USD per month). There is a time I succeeded in getting employment in a rich man’s house. He promised to pay me well but was exploiting me sexually. When I threatened to report him he sent me away. I was frustrated beyond words.
I am 22 years old. I am the first born in a family of five. I live with my mother and step-father and dropped out of school. I used to go clubbing and really had a bad company. I got pregnant and now I have a kid, he’s 2.5 years old. Life has been so hard I even tried marriage to find happiness and comfort. I was married to a young man who gave me everything but mistreated me and my kid. I had no choice but to stay with him since he provided me everything. Nobody cared about me. My husband was cheating on me but there was nothing I could do. Now I am HIV positive.
A Sisterhood for Change participant posing with her child
Kisumu Medical and Education Trust (“KMET”) is one of KIVA’s partners. In 2006, KMET created a program to address the seemingly hopeless situation for teenage girls. KMET recruited orphans, single mothers, high school drop-outs, HIV/AIDs patients and commercial sex workers for a program called Sisterhood for Change. The stories above are taken from profiles written by the girls recruited by the program.
Susan teaches tailoring skills to an SFC girl
When Sisterhood for Change began, KMET expected that upon graduation, the girls would immediately get jobs in local communities. Unfortunately, Kisumu just… doesn’t have jobs. So even with their new vocational skills, the girls were still unemployed and relying upon men for income.
So KMET conceptualized an idea for Safe Spaces. KMET has purchased a building in the Nyalenda slum and stocked it with the equipment needed to run tailoring, hairdressing and catering businesses. KMET will train the girls in business and entrepreneurship, and then they will be free to work in the Safe Space for as long as they wish. The girls will be purchasing supplies using KIVA loans.
For a long time, I wondered whether it could work. We held a lot of preliminary meetings to discuss our plans for the Safe Spaces, and the girls usually yawned in indifference. I would smile. I would pump my fists in excitement. I would lure them with cookies. Still, they seemed disinterested.
But now it’s actually happening! They are working in the Safe Spaces, selling french fries, avocado juice, and sassy hairstyles. Training takes place from April 29th-May 7th, with the generous help fof the Child at Venture Foundation. I still sometimes wonder if they are ready. I still sometimes wonder if Muhammad Yunus would approve. These girls really are the poorest of the poor, and we are trained that microfinance is not always effective with that group. Will high school drop outs be able to run their own businesses? We’ll find out…
Would Muhammad Yunus lend to us?
Milena Arciszewski is a year-long Kiva Fellow. She has been in Kenya since January 2009, helping to develop the Safe Space initiative. She loves getting emails, and can be reached at milena.kathryn@gmail.com.
A charming walled town on Lebanon’s Mediterranean coast
The other day, I walked around Saida‘s old town in southern Lebanon and just soaked in the mood of the place. The old town is far removed from the modern part of the city where cars dominate. Here, people go about their business in the narrow streets and interact in a far more intimate space. Tourists are just beginning to discover the place, though they rarely go much deeper than the soap museum on its outskirts.
A number of NGOs have been involved in this part of town for years, where the level of poverty tends to be quite a bit higher than the national level. Also, the municipality of Saida as well as the Ministry of Tourism have made efforts to upgrade the infrastructure in the town in the last ten years.
I shot this short video during my visit.
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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.
Taxi Taxi! Maaso awo
I have always wanted to write something about our transport system and the huddles involved for one to get to work early and let it be printed in the papers but again part of my mind said why not for us here! Eeh before I forget, taxi are the matatus we use here in Uganda, while ‘Maaso awo’ means find the next stage for me to get off.
As a Kiva Coordinator, Pearl Microfinance, the work I do involves a lot of movements with so many hardships, but if all this is to be added on to the messy taxis, traffic jams and the rude taxi operators especially the conductors, then my day will be messed up to the extent of killing my morale and ever wishing to grow wings to fly over to my destinations; but interestingly, the thought of meeting all the wonderful clients and their businesses restores every bit of my confidence and courage to face anything that comes my way.
In Uganda, mostly in the City centre and the neighboring towns, we have had a chaotic transport system which I think every one is having a share.
Each morning as I wake up, among the things I think of is whether I will get a fare taxi to take me to town to a stage next to my work place. This is a thought that comes to only those that wake up very early, leave alone those that leave home late and have never experienced such.
First of all, getting a taxi will mean you have the energy and power to push others away to find a seat inside so that you are not late for work. On many occasions, I have had to step on people’s polished shoes but frankly speaking people care less because we all do it at some point. Others have lost their belongings like watches, phones, and bags have been spoilt in the process of squeezing each other; and funny enough not to the pick-pocketers but to the ground. Such a situation would have been a bit fair for us who choose to ‘fight’ for the seats but in a way, this is a blessing to the taxi operators who on seeing such a mess will and have always increased the fares to more than double. Take an example of Bweyogerere stage where I come from, on a normal day, the taxi fare can be 500 shs but when such a time comes, it is usually tripled and sometimes more. Here most of us have had to choose to either be late or spend more for the journey; in most cases, we choose option 2.
When it comes to the evenings after work, it’s terrible. People are too many for the taxis; the jam is too much, fares hiked yet people do not want to spend more than enough but then who would fancy spending too much. I have always had to take my bazungu friends for shopping and whenever they mention out the price to them, they would lean back to ask, ‘Isn’t that a muzungu price?’ meaning isn’t that too much? So every body is cautious, hence my claim justified. The taxi operators usually have a saying mostly in the evenings when they want us to board their taxi that goes, ‘if you are a responsible citizen, board now so that you have time for your family’. At first, this made me feel guilty considering that I leave my family early before some of them could wake up and then go back late in the evening when they are almost ready for bed but I have learnt to explain to them and thank God they are happy whenever they see me; and however much the taxi people talk, they don’t move me until I get a taxi with a fair charge.
The scenario above affects mostly those without their own cars but even those that have cars have wanted to run away from the traffic jam by either taking a fast boda boda to work but again they think of where to park their cars and the costs involved; and in the end will drop the idea.
The writer in a morning taxi that is stuck in traffic jam on the way to work.
About the ever changing taxi fares, I think we the passengers need to find a solution to our dilemma as was a case recently.
It was in the morning and the fares were hiked; we all agreed that with the next taxi, let us all not board but surprisingly when it showed up, five people were quick to jump on but the rest of us decided not to. This is when the operators reduced the fare to normal with bitter words to accompany the news but all the same it worked and all the taxis that followed did the same. To me, this is the solution that can save us since Utoda; the taxi governing body seems to have turned a deaf ear to all the passengers’ claims.
The same thing is happening to the fight against poverty. By making the financial services available for people to develop their businesses, their general livelihood will change for the better. And this is something that is jointly done by Kiva, Kiva lenders, Kiva Fellows, the Microfinance Institutions and the Clients. Together, we can always achieve our goals.
Posted on behalf of Grace Natoolo, Pearl Microfinance
Does Business Diversification Reduce Risk or Increase It?
Perhaps it depends on the context.
Now having served as a Kiva Fellow at three of Kiva’s partner microfinance institutions (MFI) in three distinct locations, I have seen a wide variety in the types of businesses Kiva lenders are funding. I have also seen many, many situations where one client has several businesses. In a recent blog post, Stephanie Koczela, a Kiva Fellow in Uganda, very articulately explained how and why microfinance clients often have a variety of businesses. As she describes, not only is this the reality, it actually makes a lot of sense and helps these clients reduce their vulnerability to bad weather, fluctuations in supply and demand, price instability in certain products, etc.
Given that microfinance clients often operate several businesses concurrently, in my first two placements it was not uncommon for me to discover that clients had not bought what they originally said they would when they requested the loan. As a Kiva Fellow, part of my job is to verify that the clients do indeed exist, have received the amount of money they were supposed to, and that they are using the loan to invest in their business as they said they would. Accordingly, when I first heard of clients not using their loans as they said they would, it bothered me a bit.
However, in talking with the clients and with the MFI staff, I quickly learned that, of course, the clients know how best to manage their businesses. Circumstances often change. Perhaps when they first requested the loan, the upcoming planting season looked promising, so fertilizer and seeds seemed like the smartest investment. But by the time the paperwork was done, the loan funded on Kiva, and the client received the money, a tropical storm led to flooding and the soil needed time to recover. So rather than sit and wait, the client turns to other skills she has. She wisely purchases thread and, as she’s waiting for the fields to dry and to see just how rainy this rainy season will be, she is able to weave and embroider beautiful blouses that she can sell for a nice return.
All of this made sense…until I arrived at ADEPHCA in Bluefields, Nicaragua. As I’ve described in previous posts, Bluefields is a unique place and microfinance faces unique challenges here. Because there is so little industry, clients are generally quite limited in terms of kinds of businesses they can operate. I recently visited a prospective client with ADEPHCA’s loan officer, Guillermo, to see her business and talk about a loan for her. She has a very small store in the front of her home, with a very meager supply of basic daily consumption items such as rice, beans, and toilet paper. As soon as we arrived she launched into a very animated and enthusiastic explanation of her desire to start buying used clothing and selling it from her open front porch. Guillermo promptly explained that ADEPHCA only makes loans for clients to invest in established businesses that they have had for a minimum of one year.
ADEPHCA does not view having a variety of businesses as a positive thing. After seeing and understanding the value of having multiple businesses, I was initially confused and a little troubled by this position. But once again, I was reminded of how much I have to learn. Development is definitely not formulaic and Bluefields, Nicaragua has taught me firsthand how much specific geographic, cultural, political, and economic contexts can dramatically impact what can and cannot work. Rules of thumb that seem to apply elsewhere cannot be taken for granted here. Because nearly all industry in Bluefields is related to direct consumption (food, clothing, basic necessities such as toilet paper and soap, and maybe some basic construction materials), nearly all businesses will be affected similarly if there is a problem such as a natural disaster or an economic downturn. In other regions, having a variety of businesses might mean a small store, raising some animals, growing some crops, and selling clothing. In Bluefields, this kind of variety simply does not exist, so having multiple businesses does not necessarily lead to meaningful diversification and more reliable sources of income.
In general, I’m still a firm believer in diversification. Nevertheless, ADEPHCA certainly has some valid reasons for choosing to lend only to established businesses and encouraging clients to focus on growing the one business they have. That said, one thing that has troubled me since my arrival in Bluefields, is the big question of why there is so little industry here, and what would happen if someone made an educated, thorough, and well-funded effort to develop new industry. Would it be possible, with the right resources, to increase agricultural production in this sparsely populated region? Why don’t more people raise chickens in their backyards? Costeños pride themselves on their culture, so why aren’t there more local handicrafts? ADEPHCA is very small and simply does not have the resources to promote the development of new businesses. Nevertheless, I hope that someday, someone does invest in Bluefields a little more. I’d love to see what potential really exists here. In the meantime, I definitely have a newfound appreciation for how much context influences how microfinance works in a given place.
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Megan Tatman Montgomery is in her final week as a Kiva Fellow at ADEPHCA in Nicaragua. Prior to ADEPHCA, Megan served as a fellow at Friendship Bridge and FAPE in Guatemala, and will soon head to Costa Rica for a fourth and final placement with EDESA.
How Sierra Found Her Glasses
Emprender has two offices in Cochabamba and three in Santa Cruz. Both these cities have a distinct character, and reputation that precedes them. The Cochabambinos, or “ “Bambinos” (best nick name ever right?) are known for their gigantic plates of food. Everyone tells me that I would eat a lot in Cochabamba, and that I would find the climate perfect. In Santa Cruz, I would find people of a totally different culture. The kind that whistle at the women in the street, take off dancing at a moment’s notice, men with mojo and women with hot blood. All ferociously against La Paz’s beloved Evo Morales. I’m told that when I travel to the other parts of the country, that I would understand the background of Bolivia, what goes on behind the scenes. They couldn’t have been more correct. In the last few days, I’ve really learned about what goes on behind the scenes….and…under the table.
I was ushered into the station at 7am in the morning by screaming, bartering women in the Cochabamba station and rapidly found myself down 30 Bolivianos, and carefully stowed into the top seats on a bus, or floata, to Santa Cruz. The seats directly above the driver are incredibly beautiful. A huge surround seat window gives you the feeling you are flying above the road, the panoramic views simply take you’re breath away. I wondered, how did I score this!! I soon found out.
Window Views
The beautiful windows in this seat don’t open. Though I had space, a comfy seat and, of course, the view, I have never been so hot in all my life. The windows acted as a green house, and the little space got hotter and hotter and hotter. People, bags, food and even a dog in a box filled the aisle- there was no where to go. Luckily, in Bolivia, people come running to the window to sell you coolish jello at every stop, so I slurped my way down the road. The worst part though was that my glasses kept fogging up in the humidity became unbearably slippery, so I hung them on the curtain.
Nearly 16 hours later, I arrived in Santa Cruz, flopped out of the bus covered in sweat and filled with jello to wait in the heat for Julio, Emprender’s regional director to meet me at the bus station. I normally keep my cool (pun intended) in these kind of situations, but something unnerves me about Santa Cruz. Everyone has told me that this is a really dangerous station, and I’m just a little flustered. Which pocket has the big bills and which is the small? Do I have all my electronics? Did I keep that tiny scrap of paper they handed me when I boarded, and now inexplicably want back? When I get to the hotel, I realized that in my fluster, I left my glasses on the bus!
Though I’m not supposed to be running around a bus station at night, I pop into a cab and rush over for the price of 30 Bolivianos (a 10 minute drive that cost the same as the 15 hour bus). I run around the whole station looking for someone from the Trans Copacabana line. I find a friendly worker who after asking me to marry him, or provide sexual services, tells me that I arrived in bus 81, parked down this alley way. Keys between my knuckles, taxi driver following me at the rate of 5 Bolivianos, I make my way down the ally way plastered with anti-Evo posters. The drivers are at dinner, and are probably drunk, says a neighbor driver. I can return by 6 am to catch them.
The next morning I am there by six with another expensive taxi driver waiting in the parking lot (other taxis aren’t safe at this hour apparently) in the pouring rain trying to find my bus. Its not there. The ally is, but the bus is not. Trying to be as quick as possible, I run towards toward the main terminal to ask for information and I crash right into a line of barbed wire mysteriously strung between two trees. Maybe I should mention that without my glasses, I can’t see.
The bus has gone on an unexpected trip and won’t be back until night, several loads of passengers have been collected and everyone, six different people I’ve consulted, tell me there is no way they are still aboard. A pair of frames like that can be sold easily here. A last ditch effort, I leave my number with Juan, an assistant with Trans Copacabana who seems helpful, has told me I’m beautiful, and I make my tired, wet, bloody, dirty way back to the hotel to rush into the shower before I have to leave for the office.
Chasing Buses
Like modern miracle, at lunch, Juan calls – they found my glasses!! For a fee.
I ask how much, he says, “a small amount” and my phone cuts out. Rober, the Emprender loan officer I’m with, kindly accompanies me to the bus station, and waits with his car while I follow Juan to the bus. An error. I should have gone with Rober, who might have known what my glasses would cost. When I get there, they bring me down my glasses, and putting them on, the world seems clearer. I realize I have no idea how to pay a fee, or a bribe, or whatever it is I have to pay. Not expecting to have to pay this kind of thing, I don’t have the best denominations. I have a 20 B note, or about $3, and a 100 B note, which is about $14, which is a bit of money here. I rarely spend 100Bs in one setting. I give the driver the 20. He looks at it, scoffs throws it in the mud and trumps off. I feel terrible I want to do whats right. Is it right to pay? Is it right not to? Juan picks it up, tries to make me feel better, but explains that the driver was expecting at least 50, oh, and that he himself expects an additional amount. Can I ask for change? 100 Bs is a lot of money for me, and I’ve already spent hours in the mud, tons of money on taxis, I’m all cut up from the barbed wire, I was at the station late last night, and at 5 o’clock this morning and now this!? I miss the lost and found boxes so common in the US. Where is the little drawer behind the counter?
The driver won’t look at me, or stop grumbling loudly to his buddies “Gringa blah blah blah Gringa blah blah”. I leave the 20 B plus the 100 B (because I have to pay Juan something) with Juan asking him to share because the driver now won’t take anything I hand him and keeps throwing it in the mud. And looking at me with a combination of repulsive lust and hate. Will Juan share? I feel like a bumbling cultural idiot, I ashamed I can’t do what seems to be normal all over the world, and what looks so easy in American crime movies- passing slippery money from hand to hand, no one noticing. At the same time, I’m furious that I should have to. Who knows if it resolved. Glasses in hand, or rather, on face, my last pair of pants thoroughly wet, Rober and I take off for the next Kiva client.
Later, I met a group of women today who really brought it all into focus. One of them sells cosmetics for Avon and needed a loan to pay a fee to them that she feels is unfair. One of them was unfairly fired from her job as a babysitter and is trying to make ends meet by selling sweets from her home. One of them has a husband who is a bus driver who is constantly working more hours than is legal, and because his company doesn’t pay insurance for the truck, only the cargo, a recent accident has devastated their family, and they needed a loan. Rober and I have a long conversation about how lawyers are all crooks and their only ability is to suavely do what I couldn’t – pay bribes. Later I learn from one loan officer that El Torno, a town outside of Santa Cruz, where Emprender has an office, is suffering from a corrupt mayor who avoided corruption charges by signing up with Evo´s party, now he´s a true Masista. This is of course what everyone believes, but the truth is probably somewhat more nuanced.
New Friends
Its not that the country is so ramp with corruption that small businesses can’t get ahead, but rather that it happens often enough that it appears no one trusts the system. They don’t trust the political system, or the economic system or any of the promises that have been made to them by most institutions. Despite all this by at the end of the day, as Rober helped me over a slippery slope, I realized, maybe trust can begin with your solidarity group, and then with your bank. Then with your neighbor, your employer, your political party, and with your country. I felt a little bit more cheery, and felt like I could see.
You have internet but no running water?
Someone asked me how it was that I seemed to have (almost) constant access to the internet AND no indoor running water or heat. From an American perspective, it seems irrational and contradictory. But, Guatemala is filled with (seeming) contradictions and contrasts. I suspect that many of my “fellow” fellows have experienced the same in the countries where they are working.
The family I live with has satellite TV, a wide screen television (and a television in every bedroom) but they have no indoor running water or heating. They still wash their laundry by hand in a lavadero, outside. They cook over a wood stove. The water for showers is heated by a fire lit under a big black drum, which they fill with water early, every morning (before the water runs out). They make their own masa from the corn that they grow. And they all have cell phones, MP3 players and their favorite “novellas” (soap operas) on television.
- Thatched roof home with satellite television in Tulate
The office where I work has internet access (including wi-fi) and right outside my window, there is an elderly couple working their land like it’s probably been worked for centuries—all by hand, living in an adobe structure (with no running water or heat). One of my most surreal experiences during this fellowship was the day I was sitting in my little office at ASDIR, uploading Kiva borrower videos to YouTube; listening to a loan officer explain the terms of a loan in K’iche and, through my office window, watching the elderly couple plant their corn.
- the view from my ASDIR office in Nimasac
At dinner, in the weeks before Easter, my host family would sit around the dinner table and listen to the story of Christ’s resurrection told in K’iche, being broadcast over a radio on someone’s cell phone.
The inside of their stores and homes are very tidy—almost meticulous. Yet, they don’t hesitate to litter pretty much anywhere and everywhere else.
- trash…it’s everywhere!
Lori Gibson Banducci is a Kiva Fellow, working with ASDIR in Nimasac, Totonicapan, Guatemala where she blends in perfectly with the people who live here.
Lori and Kiva Borrowers
Chickens for when the rains don’t come
Sometimes, when interviewing the entrepreneurs from Pearl Microfinance, Uganda, I am startled to discover how many businesses they have. They are teachers with a few milk cows on the side, or used clothing salespeople who also keep pigs, or farmers who also raise cassava, matoke, and chickens! These ‘super entrepreneurs’ amaze me, but I am always left wondering why do they choose to have so many businesses. Wouldn’t it be better for them to focus just one? Each cycle they could inject all their loan money into one business and it would take off!
As is typical when I am making observations in a different culture, when I leave my assumptions behind and listen to the people who actually live here, they patiently show me that, of course, they know better…
The Balikyewunya Group
A few weeks back, I met a borrower named Margaret at a group meeting. Margaret told me all about being a furniture materials saleswomen. Where she sells, where she buys, and the profits she makes. She told me that the profit she makes is enough to pay school fees for her children and grandchildren. After telling me about being a furniture materials saleswomen, she told me that with her last loan she had invested in a broiler chicken business! I was really excited for her and she seemed really proud.
After I had finished interviewing Margaret, and Florence the florist (a demonstration of how long we have to wait for the members to gather for the group pictures we post on the Kiva website!), there was still a little time before the official meeting began. Margaret asked me if I wanted to “see her business.”
I love the literal meaning of this question. She was not asking me if I wanted to see her business meaning her office building or some report about her annual returns, she means do I want to come experience her business, do I want to step into the chicken coop.
Margaret with her new chicks!
It smells a bit, which I expected, but I was startled by the amount of energy in the little room. All the chicks were hopping about and peeping at loud as they could. As she started to feed them, I noticed that either these chicks really trusted Margaret, or chicks are smarter than goats.
Goats seem to have decided that, when being fed, the best strategy is for all the goats to try to eat the same exact food at the same exact time. As soon as the farmer throws the first hand full of food, all of the goats form a rugby style scrum, pushing each other and climbing on top of each other to get the food in the middle. They completely ignore any other food that is set down unless the farmer forcibly shows one of them at which point they all pile on top of that food! This is clearly not the best of plans and inevitably, some poor goat is left on the outside of these scrums bleating and hungry! Margaret’s chicks seemed smarter… they (mostly) waited their turn.
I left this visit amused with the chicks and impressed with Margaret’s dual businesses.
Last week I got the chance to visit Margaret again. This time I met Margaret alone, so she showed me all of her businesses. I was surprised that she had more businesses since I remembered that she had already told me about 200+ chickens and a furniture business. Little did I know…
Margaret showed me her farm, where she grows enough food to feed her family, and all any others who might come around. She has enough matoke trees (matoke are the bananas that are used to make the staple food here) on her little plot that if the rains are good, she can sometimes sell her surplus matoke in the markets. She has a number of cows that she uses for milk and a few that she fattens for the meat. She also has a few goats, a few pigs, and a few ducks.
Margaret's other businesses, her farm, one of her cows, and some of her pigs
As we stood on her farm, she explained to me that these home businesses (her farm, cows, pigs, goats, and ducks) together with her furniture business provide enough money for her daily life. She is able to feed her family, buy a few outfits of clothes (this can be a sign of middle class, as the poor often only have one outfit and the very poor may not even buy one for the smallest of their children), pay school fees, pay rent on one of the farming plots that she rents, and have a little pocket money.
If all her daily needs were met by these businesses and her existing business were clearly a huge amount of work, I wondered why she had started a new chicken business?
“The chickens are for when the rains don’t come,” Margaret explained. The rains in Uganda delayed this year. Both of her farming plots produced very little food. She was unable to feed her family and she had none left over for selling. But, she anticipated this and took a loan to start up the chicken business. Because of her profits from her new chicken business, she was able to support her family and she became a critical customer for those people who choose to put all their efforts into their farms instead of having any other businesses.
Brilliant.
PS Look how much her chickens grew!!
With her chicks a few weeks later!
~ Stephanie Koczela is in her seventh week of her posting as a Kiva Fellow at Pearl Microfinance in Uganda. Join the lending team for Pearl for more updates on the borrowers at Pearl and the organization itself! ~
Life in Nimasac Guatemala
So, warning, this has NOTHING to do with microfinance.
But, here are two videos that give a definite flavor of life here in Nimasac, Guatemala where I have spent the last two months as a Kiva Fellow with ASDIR, Kiva’s field partner in Totonicapan, Guatemala.
K’iche is the predominant language spoken here. Many people have asked me to describe what it sounds like, but I’ve found that to be an impossible task, so here is a short video of animated dinner conversation in K’iche.
The second is a glimpse at what is involved in washing clothes here in Nimasac (it takes a LONG time!)
Lori Gibson Banducci is a Kiva Fellow working with ASDIR, Kiva’s field partner in Totonicapan, Guatemala where she blends in perfectly with the people who live there.
Lori with Kiva Borrowers
Buy’em, Sell’em: The Food Market
Living in Bamenda, Cameroon is relatively inexpensive. Taking a taxi from one end of the city to the other can cost you a maximum of 250 CFAs (50 cents). Granted, with everything else, you have to sacrifice some luxuries. Using the taxi as an example, the driver, at times, will fit 7 passengers with him in his mid-sized sedan. That is not unusual, especially for longer trips. Other purchases can be extremely cheap when compared to US prices. An avocado, or “pear” here, costs about 75 CFA (or 15 cents). They can cost even less at times. The trick to getting the low price is, however, to bargain for it. No prices are set and getting a good price is not easily done in the food market in Bamenda.
The two markets in Bamenda are large, sprawling matrices of single vendors. Each vendor has her or his own station, most of which are made out of wood. These stations house products staked up to their roofs, or they are open shops with large bags on the ground, filled with Cameroon-grown produce. Bargaining in the market can be a daunting task, especially if you are not used to bargaining, you look like a foreigner AND you are not sure what the price of food should be. The marketplace is surely competitive and each seller is trying to make a profit, so you must be well-informed before heading into the market matrix. Knowing someone, or in my case a GHAPE borrower, can be helpful for she can not only sell you her goods at a fair price, but she can also show you around and help you buy other foods at lower prices.
At GHAPE – Grounded and Holistic Approach for People’s Empowerment, most of the entrepreneurs are farmers and/or sellers in the market. Currently, their loan sizes range from 40,000 CFA to 200,000 CFA ($80-$400), and they are disbursed only to individuals. These borrowers work very hard at what they do. Those that sell in the market usually have to purchase their produce from a farmer or distributor, haul their products via public transportation (usually taxis), rent a place within the matrix of a market, and then they have to be able to sell their products at the right price to earn a profit, yet not turn away customers before their produce spoils. They call this type of business “Buy’em, Sell’em.”
Bamenda Food Market, Cameroon
In the Belo branch of GHAPE, the majority of borrowers are farmers. That means they have to balance the loan repayments with the farming season. Their loans are a minimum of one year and usually take a large portion of the year to see the fruits from their seeds. So, on top of farming their land, some borrowers supplement their income by selling retail items in the market. Moreover, new GHAPE members are expected to repay their loan right at the beginning of their loan term, as well as attend center meetings (of about 40 members) twice a month. Challenging enough? Not quite. In addition, most GHAPE members are not only entrepreneurs, but they are women, and with that comes a lot more responsibility in Cameroon.
In Cameroon, women run compounds. A compound is just as it sounds, a bit of land crammed with a few small, one-story houses. The people who live around you are not necessarily blood-related, but everyone helps out with chores. If your compound has children on it, as most do, then everyone shares in the responsibility of raising them. At times, growing up, you may never know who your real mother is because everyone who has children is called “mama” and you may never know if you are truly related to the elders on the compound because everyone is address as “uncle” or “auntie.” On top of raising children, living in Cameroon is difficult for someone who does not make a large income. Food is either grown at your distant farm, on the compound or you buy in bulk. Cooking is done over a fire in a special room outside. You are even lucky if your compound has running water on it. Outside of the major cities, one has to do some walking to get to a clean water source. Taking care of your compound can be a full-time job, all in itself. Woman, who not only run a compound, but provide the income for it, and in a lot of cases raise their children, are carrying a heavy workload. This sheds light on how GHAPE members,especially those that work in the market environment, do so much more work than just pay back their loans.
As you descend down the hill, onto the food market, you can see how vast and complex it is. Row after row, column after column, you can count hundreds of booths with women working in them, selling their produce. Occasionally you can spot a man, but most of them are on the outskirts, selling freshly butchered meats. In the middle, almost at the front entrance, sits two GHAPE borrowers, both women. They sell dried beans and “Irish” (potatoes). Emilia, whom greets you with the warmest smile every time you visit, is on her feet ready to help you buy something. So, you get a couple of cups of beans from her, perhaps some carrots from her neighbor and thank her for her help. You also tell her that you will see her soon at the center meeting next week. GHAPE has a saying, “When we are together…we are one,” and I can tell they mean it.
So, despite the overwhelming nature of buying and selling in the marketplace in Bamenda, it becomes apparent that sellers are not money-hungry and selfish, as we see so much in consumerism. Instead, once you get a chance to know them, you sense a bond between those who work so closely together in the market. Most of the time, borrowers say that they work hard to sell their goods at fair prices. In the end, those that are buying their produce are trying to get by as best they can, just like the farmers and the sellers. It takes time to see this dynamic, but as an outsider things of this nature sometimes do. One cannot say enough about the character of some of those that borrower from GHAPE and Kiva. Especially those who work so hard at providing food for not only the masses, but themselves and their families. Understanding the food market is like understanding Cameroon, it reveals some of the best and most trying aspects of living here.
Poverty Isn’t Always Pretty
Wrapping up my six month fellowship with Kiva, I’m not sure how to express that thought any more artfully. On balance I’ve been inspired by the people I’ve met who, with only meager means, must spend long days at arduous tasks in order to support their families. But I’ve also had to confront the reality that a life in poverty often means making hard choices every day. The temptation to judge these decisions can be tempting until you realize that in many cases people have few good options on the table.
In Tajikistan I spent many days in the bazaars and was initially surprised at the number of school-aged children pushing carts or making change. Why are they not in school working toward a university education and a good job? The easiest answer is that there are no good jobs in Tajikistan. In a past blog post, I explained the challenges faced by Tajiks seeking to pursue an education or more viable jobs.
One day Sulton Kurbonov stopped at the MicroInvest office to make a loan payment and I had a chance to meet with this soft-spoken father of seven. He explained that he had taken out a loan to purchase a color television set and my initial reaction was one of disdain. You’re struggling to make ends meet yet you’re taking out loans to buy a television?
After some reflection I realized what a patronizing attitude I had taken. Here’s a man who has lived honestly and worked hard for more than 30 years for little reward other than the sustenance of his family. Is he entitled to allocate some of his income for entertainment? And is he really much different than those of us who finance a car we couldn’t afford to buy in cash?
Having been overseas for six months, I missed out on many of the lesser news stories happening in the US. This was actually a welcome circumstance. After being in the US less than a week I happened across an article on the “Octomom.” The what? I was quite surprised at the level of vitriol directed at this new mother for doing nothing other than reproducing. But after being bombarded with endless details on her, it became apparent that the crux of the issue was that this woman was receiving public assistance.
I thought back to my experience with Sulton. I judged him because his loan was provided in part because of my efforts. Maybe a little tiny piece of me felt like I somehow owned him or at least his decisions. And perhaps I thought that his poverty was a reflection of his capabilities. That may or may not be true, but the essence of human dignity is the ability to make choices – good or bad. Immanuel Kant said, “morality, and humanity as capable of it, is that which alone has dignity.”
The greatest thing I see in Kiva and its lenders is the ceding of decisions to the borrower. Making a loan in essence conveys a trust in the borrower and preserves the dignity of the relationship. But it also means that borrowers may make decisions at odds with your own thinking.
A recent borrower in the Philippines took a loan to raise fighting cocks. This is a very popular and legal activity which provides an income for many families throughout the country. While many lenders may not want to fund such a loan (and exercise their own free will through such a choice), is it appropriate to deny this borrower access to Kiva since we may not agree with how she chooses to legally pursue her livelihood?
This is one of the more difficult questions we face when we engage in charity of any sort. Do we give with the expectation of control? Or do we give with the acknowledgment that we are empowering others?
Loan Officers: The Unsung Heroes of Microcredit
Long hours, low pay, angry barking dogs, collection calls, long motorcycle rides and even longer walks…………what on earth keeps these loan officers “in the saddle” 8+ hours a day, 6 days a week? I interviewed two of ASDIR’s (Kiva’s partner bank in Totonicapan, Guatemala) loan officers to try and find out.
I have to say I have been most impressed by the dedication, care and compassion of the loan officers at this MFI. I would also bet that most of Kiva’s 90+ field partners have similar, committed loan officers—- clearly motivated by a lot more than money!
Interview is in Spanish, with subtitles and, it will soon become clear that I was not selected as a Kiva Fellow on the basis of my video editing (or taking) skills.
Click on this link for more information on ASDIR
U.S. microfinance, Let’s see.
The other day in the Mission district at Kiva headquarters in San Francisco, I converged with three micro enterprises, on just one corner. A young man selling fresh oranges, a Popsicle and ice-cream cart vendor, and another man with a tall stick of cotton candy- $2 each. Although this coincidence is quite novel, it does explain another, larger phenomenon. Perhaps the true impact of small businesses in the U.S. is underestimated. AEO, the association for Enterprise Opportunity, says that 87% of all businesses in the U.S. are microenterprises, businesses with fewer then 5 employees.
As a fellow, Kiva has given me the opportunity to research U.S. microfinance as they look into expanding into the U.S. market. The Mission district for example is one of the most culturally and economically diverse neighborhoods in the U.S. There exists an interconnected community of businesses, many of them reminiscent of microenterprises I’ve seen traveling in the developing world or even on the Kiva website for that matter. It’s made me second guess why I hadn’t come here to study Spanish and Latin American culture- unarguably I would have had the most diverse experience possible.
In San Francisco, Denver, Omaha, Detroit and New Orleans there are all types of fascinating microenterprises. Businesses owners with retail shops, cosmetics sales, arts and crafts, janitorial services, and food vendors- just to name a few. Many of these businesses are using microfinance to get started and to get ahead. The backbone as U.S. businesses are sometimes referred to is asking for some reinforcement in a time of hardship. It may be microenterprise that helps tone the future of business in the U.S. Lets see.
Over the coming months of my Kiva Fellowship, I will continue to research U.S. microfinance on many different levels in several U.S. cities. Take a look at the video I made while in San Francisco’s Mission district. I will be continuing my research in New York City, so stay posted for more on U.S. microfinance.
Link to Video-
Contradictions, Complications, Juxtapositions, and Genocide
It’s easier to make sense of Rwanda if you erase the human element of the Genocide that happened here fifteen years ago. If we could just pretend it wasn’t actual people who perpetrated the one million unthinkable acts, it would simplify the dynamics of the country. Afterall, if we acknowledge that it was not only people but fellow Rwandese who held the machetes, we need to also see that they still exist—and not in an abstract way but in a day-to-day, walking down the street, drinking milk for breakfast, and sending children to school kind of way.
Many perpetrators of the 1994 Genocide, or genocidaires, are in prisons throughout the country. It is likely that many others are not. Either way, those who committed the Genocide still live amongst those who survived. Prisoners do manual labor all over the country, working on plots of land, building brick walls along roads, and doing various other public works projects in plain sight. Their blue, orange, and pink uniforms (each prisoner is in one color which signifies the gravity of their crimes or status in prison) dot roads and farms throughout the country as they serve their time while the rest of the country looks on. They pass through lives as they stand packed in the backs of trucks and taken between their projects and their cells. It is a testament to the discipline and ingenuity of President Kagame that he has those who ripped the country apart now manually putting it back together. As he drives to develop his country, he is making use of those who, through violence, instilled the urgent need.
I have told some people back home about this, about the uniforms, about the prisoners, about their constant presence and my inability to grasp even a fraction of what it must be like to be a survivor and see them every day, because I’m here fifteen years later and as an outsider and even I shudder at the sight. Those back home are always shocked. “You mean you see them!” Well, yes. This is recent history—very much within the memories of those still living. One of the most complex issues this country faces is how to go on, develop, heal, when the painful past remains present. After a horrific divisiveness, how is everyone supposed to come together again?
I cannot begin to answer that question—far more gifted people than I are still grappling with it—but I would like to try to convey a sense of the impossible complexity of the issue. In January I went to visit a client in a rural part of Rwanda. We spoke to a woman who proudly showed the many ways in which she has expanded her business since receiving the Kiva loan. Afterwards, I went to the Kiva website to post a journal update on this woman but couldn’t find her on the site. A few weeks later I went back to the branch and told them she must not be a Kiva client. “Oh,” they responded, “the loan is in her husband’s name, not hers. He was just away that day.”
A month after that I discovered that “away that day” was a euphemism for “serving time in prison for perpetrating the 1994 Tutsi Genocide.” This time, the husband who had been away was now back so we were going to go see him for a Journal update interview.
I generally don’t get anxiety before meeting with microfinance clients. In my experience, there is little to be anxious about, minus some possible awkward moments or silent staring at one another if the translator leaves the room. This time, I began to panic. I knew that if I saw him as a microfinance client, he would have to be human. Previously, I saw genocidaires at enough of a distance that I wasn’t forced to remember their humanity or look them in the eye. I’m not proud to admit: I preferred it that way. This would complicate what I had been trying to simplify. A question that comes up repeatedly here is how so many “normal” people, non-violent people, certainly not killers, could have been moved to pick up weapons and kill their neighbors. It makes no sense. I knew that meeting one of these complicated individuals whose motivation I would never understand would confuse the idea in my head even more.
I spent the car ride to his remote home trying to imagine what he would be like and bracing myself to be professional despite biases. My preparation was cut short as, along a dirt road, the staff told the driver to stop the car and exclaimed, “This is our client!” He was pushing a bike with a load attached to the back, headed towards town. It had just begun to rain so we ushered him into the car, squeezing four across in the back seat of our pick-up truck.
My immediate reaction was that he had such a kind face. I noticed his warm smile and friendly greetings to the staff. Then he shook my hand and it was just like so many greetings I’ve exchanged here before. I tried to eliminate (or at least delay) my judgment so that I could focus on the Journal interview. It was brief since I had previously met with his wife and learned about his enterprises. After a few laughs and a few more questions, we were shaking hands again and he was back in the rain, pushing his bike.
It was a jarring interview for how totally routine it was. It forced me to wonder how many other genocidaires I’d spoken to, worked with, passed on the street without even realizing it. He was not a man you would pin as a killer. He was free because he had confessed his crimes, his confession was accepted as true by the gacaca court (a court system that has been established to process trials for accused genocidaires on a local level), and he had completed the assigned community service. Now he was back at home with his family, dressed in civilian clothing, and working in his businesses.
This client was the closest I’ve come to the reality that ultimately all genocidaires will be free. He put a face to the abstract impossibility that this country is facing as it frees prisoners from overcrowded prisons and reintroduces them to society. Just down the road from his house is a church in which thousands took refuge as the Genocide began. More than 10,000 people were killed in and around the church between April 10th and April 16th 1994. It’s an eerie juxtaposition.
I have no neat conclusion for this blog entry. I’ve been trying to come up with one for 3 weeks. Instead, I keep adding paragraphs that turn into ramblings but in no way neatly tie up my thoughts. Now, during a week commemorating the fifteenth anniversary of the 1994 Tutsi Genocide I’ve decided that if I wait for a proper conclusion, it will be many many years before I post this. So I’ll end it here, no conclusion, no answers, no neat sum-up and no lesson learned. I end it with more questions than I started with.
Julie Ross is currently a Kiva Fellow at Vision Finance Company in Rwanda. In December she finished her first placement at BRAC Tanzania.
If you’d like to support Rwandese entrepreneurs and help the country on their push towards development, please see their currently fundraising loans or join the lending team.
Microfinance and the Bottom Billion
I recently picked up The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It by Paul Collier, Professor of Economics and Director for the Study of African Economics at Oxford University and former director of Development Research at the World Bank. It has been a grim and simultaneously enlightening book, dubbed as a must-read by the New York Times and set to become a classic according to the Economist.
In a nutshell, The Bottom Billion states that our perception of development for the last forty years has been a rich world of one billion people facing a poor world of five billion people. However, this thinking will soon be outdated because most (80%) of the five billion live in countries that are developing, and at amazing speed. The real challenge for development lies in the one billion people at the bottom who live in countries that are falling behind and oftentimes falling apart.
These one billion remain mired in extreme poverty because of four “traps” that must be dealt with. The first trap from which poverty stems is “the conflict trap” – civil wars or coup d’états that are costly and can be repetitive. The second trap is “the natural resource trap” – dependence on certain resources (oil, minerals) that actually stifle economic growth. Third, poverty can come from being “landlocked with bad neighbors” – a lack of access to ports and bad neighbors translates to no trade. The last trap is “bad governance in a small country” – terrible governance and bad policies can quickly destroy an economy.
Collier also proposes several plans of attack on poverty that focus on the bottom billion. Wealthy nations have too often subscribed to the myth that the fight against poverty must focus on poverty everywhere. This might be why microfinance hasn’t been successful in accessing the absolute bottom of the pyramid and eliminating the most extreme poverty. Microfinance institutions have mostly been drawn to the more attractive business case of serving clients who are not in the bottom billion – in fact, only about 5-10% of microfinance funds ever reach the poorest of the poor.
What microfinance needs to begin doing, is to branch out beyond the mainstream to include a focus on the bottom billion. Tom Coleman, founder of Microfinance Consulting and former Director of Research and Development for the Chicago Board of Trade (CBOT), calls it Bottom Billion Microfinance (BBM). How can we re-channel our focus to highlight this population? Two-thirds of the bottom billion live in only four countries – so we can begin there. Further, a modest 15 countries have the highest concentration of people living on less than $1/day, and together represent 80% of all people who live on less than $1/day. A total of 31 countries have over 40% of their people in the bottom billion – most are in Africa.
The important questions we need to answer are: what kinds of holistic poverty-ending services should microfinance provide? What kinds of incentives can increase the number of bottom billion served, and the quality of services they receive? Ending poverty is not a financial services-only business. Microfinance has made remarkable strides since its conception in the 1970s. As our world continues to develop, we must continually revisit how we’ve been fighting poverty. We must establish new techniques and standards so that the bottom billion are not left behind.
Welcome, Kiva, to West Timor!
West Timor is the country equivalent of Robert Downey Senior. The usual reaction is “West Timor? I didn’t know there was a West Timor. But I’ve heard of East Timor so I suppose it makes sense”.
And indeed it does make sense, especially if you live here. West Timor, formerly a Dutch colony until it was un-clogged in 1945, is on an island towards the eastern side of Indonesia (Timur conveniently means “east” in Indonesian) but, it should be stressed, not the most easterly island as that is Papua and or West Papua (to clarify please see www.google.com), and is attached to East Timor, who (in)famously fought for and gained independence from Indonesia in 2002. It forms part of the Indonesian province of East Nusa Tengarra, the poorest of all thirty-three provinces in Indonesia. It is also home to TLM, one of the newest Kiva field partners.
Tanaoba Lais Manekat (“Serve With Love”), or TLM for short, is a Christian organisation founded by the protestant church in 1994. Around eleven thousand clients are recipients of the TLM loans (and love) within the province. Some of the fortunate ones will shortly be receiving some Kiva love too!
TLM are aiming to grow their operations and client base rapidly, and Kiva is a big part of these plans. They are currently in their pilot phase so if you manage to find one of their loans before it’s fully funded, count yourself lucky! TLM loans are so hot right now.
In return for your loans, TLM are showcasing a unique-to-Kiva cashless cow-fattening loan where the borrower receives a skinny cow and one year later shares the profits from the sale of the (hopefully) fatter cow. Your repayment is genuinely dependent on how much a cow eats. Will you find a cash cow? Or will you be left crying over spilt milk?
We need your help to get fat!
Below is a video introduction to TLM featuring a trip into the beautiful Timor countryside and some heroic tree climbing.
Ways to support TLM:
Join the TLM lending team on Kiva
Follow TLM on Twitter! Kiva Coordinator Shanty, probably the only twitterer in West Timor, will be keeping TLMs twitter feed updated with all of their Kiva activities. Be the first to know when new TLM loans are posted!
Check out all TLM loans currently fundraising on Kiva here and make a loan!
Kiva Fellowships are unpaid voluntary positions and I totally forgot to do any fundraising for mine. If you would like to help me out in any way, you can donate to me here. I wish I’d thought of this earlier. Thank you. Kieran
The Feel-Good Line
I told myself I’d avoid writing a blog entry that involved too much rumination on the meaning of microfinance. Oops.
Before I left for Paraguay, I had a long conversation with Cara Gutterman, the first Kiva Fellow assigned to Fundación Paraguaya. In addition to giving me some insight into the food (fine) and the weather (very, very hot), Cara told me that many of the borrowers she met during her time in Paraguay didn’t seem to be lifting themselves out of poverty; in fact, they didn’t seem to be the poorest of the poor, but instead were a group of hard-working, above-the-poverty-line folks who used credit simply to maintain their level of income. (Cara wrote a great blog entry on this issue and what it suggests about the relationship between microfinance and poverty).
Now that I too have met some borrowers who fit this description, I spend a lot of time thinking about what they mean to the Kiva lender and to the Kiva brand—those familiar green leaves that stand for empowering the impoverished. (I’m definitely not the only Kiva Fellow to have tackled this or similar issues, as can be seen in an earlier post: Discussion on Microfinance). Questions abound: How would Kiva lenders feel if they got the impression that their money wasn’t going to someone who is impoverished, but instead to someone who might be considered a member of Paraguay’s lower-middle or working class? Are such loans misrepresentations of the Kiva brand? If so, where’s the feel-good line? At what point do we stop feeling good about the income level of the borrowers we support and start feeling worried that our money isn’t doing what we want it to do?
Kiva has facilitated more than $2 million of investment in the people of Paraguay, and each week that I spend meeting the beneficiaries of this investment, my feel-good line moves up a notch or two. Many of the borrowers that Fundacion Paraguaya reaches, especially the participants in FP’s Women’s Entreprenuership program, are extremely poor; and I’m still moved and energized when I meet a low-income borrower who, by combining capital with entrepreneurial instinct, starts making enough money to send all of her children to school. But I’m equally pleased when I meet someone like Jorge Romero, whose 18-year-old barber shop provides a solid, steady income for him and his family. Kiva money didn’t lift Mr. Romero out of poverty. Instead it strengthened an already stable business, supported a popular, visible storefront in the small town of Ita, and probably gave Mr. Romero, his partner, and his daughter the financial resources they needed to live just a little bit more comfortably. These aren’t the type of results that caught Oprah’s eye or made Kiva “The only non-profit that matters”, but they are the results that healthy communities are built on.
Jorge Romero at work in his barber shop
That’s because a loan to Jorge Romero isn’t just a loan to Jorge Romero. In any given month, he might catch a ride in Benedicto Gonzalez’ taxi, ask Juan Carlos Cardozo to build his daughter a new bed, or purchase tobacco sold by Maria Ines Bordon. These connections stir the economy and, more importantly, create opportunities for other Fundacion Paraguaya entrepreneurs to enter the market and start the climb towards financial stability. Were we as a lending community to reject borrowers like Mr. Romero because we didn’t think they were “poor enough,” we would mitigate Kiva’s ability to bring about larger scale, sustainable change in the communities where we invest our money.
So I think the brand is safe. Yes, the green leaves stand for the fight against poverty, but they also stand for growth, and if leaves are to stay vibrant and strong, they need an environment that nourishes the saplings along with the sprouts.
And where is the feel-good line? Let me put it this way, if one day Kiva changed its mission statement to read: Kiva’s mission is to connect people through lending for the sake of alleviating poverty and strengthening the middle class across the globe, I’d feel great about it, and I’d argue that you should too.
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Want to hear more from Paraguay? Join the rapidly-growing Team Fundación Paraguaya!
Literacy and Child Labor in Bluefields, Nicaragua
Having spent two months in Bluefields, Nicaragua now, I have been struck by the near absence of two characteristics common in impoverished areas: illiteracy and child labor. This statement is based purely on my own observation. Unfortunately very little statistical data exists for this region. Nevertheless, what I have seen here in terms of these two particular, yet intimately related, challenges to development is one of very few things that gives me hope and even a little optimism for future development here.
When interviewing recipients of Kiva loans, I often ask the client how many years of schooling they have had. If they have had very little, I follow up by asking if they can read and write. In my first placement as a Kiva Fellow in Guatemala, less than half of clients I interviewed were literate. It was not uncommon to see loan documents full of fingerprints instead of written signatures, as many clients could not even write their own names. Yet in Bluefields, far more isolated and with far fewer opportunities in many respects, only one client out of the dozens I have interviewed has been illiterate. And despite the fact that he cannot read or write, he worked diligently with his wife to make sure he would be able to sign his name on the loan documents.
As I realized more and more that ADEPHCA’s (Kiva’s field partner in Bluefields) clients are nearly all literate, I began pondering why that might be. ADEPHCA does not currently provide loans to start up new businesses, only lending to those that already have a business. So perhaps this requirement rules out the truly poorest of the poor, which are more likely to be illiterate. Nevertheless, I still got a general feeling that literacy is more common than one might expect in an area as underdeveloped as this. The Nicaraguan government has had several waves of literacy campaigns, starting in the early 1980s and off-and-on up to the present. These campaigns have been declared a great success, though some question the reliability of the related statistics that have been published. Hard data aside, I have observed two specific signs that reinforce my belief that literacy is surprisingly high here.
For one, there is virtually no child labor here. Nicaragua is now the fifth Latin American country I have lived in, and I have traveled in many other developing countries in Latin America and other parts of the world. In all of them, I have seen children working all hours of the day and night, selling local handicrafts, fruits and vegetables, washing windshields, juggling on street corners… Families often do not have the small amounts of money needed to pay school registration fees and buy uniforms and school supplies. Instead of going to school, children are needed to help contribute to the family expenses and spend their days in whatever income generating task they have access to. The cycle of illiteracy persists.
Yet when I ask ADEPHCA’s clients if their children are in school, I have been told “yes” every time. And as I walk the streets of Bluefields on weekdays, nearly all of the school-aged children I see are in neatly pressed uniforms and carrying backpacks.
My second source of optimism is very anecdotal, but interesting nevertheless. I currently live with a Nicaraguan family. I have a “little sister” here that is in her last year of high school. Before she can graduate, she is required to spend at least 30 hours tutoring an illiterate person in the community. I’m still not entirely clear on the details of how she is supposed to find this person or if she is given any sort of guidance as to how best teach literacy. Nevertheless, the fact that this is a requirement for all students before they can graduate from high school is a quite remarkable indication that Nicaragua cares about literacy and aims to do something about it.
So while I still don’t know if the fact that nearly all ADEPHCA clients are literate is a reflection of successful literacy campaigns and an understanding of the importance of literacy or if it’s because they are not currently lending to the poorest and illiterate portion of the population. What I do know, though, is that nearly all children that I have seen in the area are in school. Furthermore, these children are required to promote literacy among others as part of their school requirements. These two very basic facts give me hope that the region is making important strides in the right direction to combat poverty and improve quality of life. And as the general population becomes increasingly educated, microfinance can be increasingly instrumental in providing opportunities for the poor to channel their higher level of education into productive, income-generating businesses.
A Rose from Florence
Thank you for all the loans you make to Kiva. As a Kiva Fellow, I get the joy of receiving the gratitude that is truly meant for all of you.
A few weeks back I had the pleasure of meeting Florence Musola at a loan disbursement for the Balikyewunya Borrower’s Group. She was one of the first members to arrive at the meeting, so we were able to carry out a lengthy interview while the other members trickled in. It was fortunate that we got started early because Florence had lots to tell us about being a florist in Kampala, Uganda.
Balikyewunya Group
She started off by explaining that when you work with brides it can be a headache because they are sooo particular. But, it is not just brides who are complicated, she continued, when you are a florist you have to know that people from different religions want specific colors and flowers at their various ceremonies. After making sure we were getting all of this down, she explained in infinite detail that there is a huge difference between a flower arrangement for a center table and one for a side table. Who knew?
The whole interview was far from what I expected when I first started doing Kiva Borrower interviews… I spent half of my time amused at what I imagine are similarities between her clients and floral clients all over the world, and the other half trying to wrap my mind around the concept that I was interviewing an upscale and very knowledgeable florist who happened to be mixed in with the poultry farmers, dairy farmers, and pig farmers of Gayaza (the town where she lives).
Her Shop Sign
Today, I managed to visit Florence at her place of work. (I made a short video during my visit.) Her shop was bustling and busy. It turns out there are many other florists who work out of the same location. The smell of her shop transported me back to the floral shop where I used to buy flowers before high school dances. It was one of those moments where if I had closed my eyes, I could have been in a floral shop anywhere in the world.
While we were there, Florence showed us albums of the work she has done for weddings and birthday parties. Her work is amazing, full of color and creativity beyond what I have ever seen in the USA. Anyone planning to get married, or have any kind of party, in Uganda should definitely hire her!
Some pictures of the flowers she uses in her arrangements
At the end of the visit, she gave me a beautiful red rose. I had had such a wonderful visit, I wished that I had something to give her. Now, writing this, I wish I there was a way to pass my beautiful rose on to all the people who made loans to her. She was giving me the rose because I represent those people and really all the people who make loans to Kiva!
Florence and I (and Grace with the bouquet she bought!)
Although I can’t pass my rose, I really want to pass on the gratitude she expressed. Thanks for making Kiva loans possible for Florence, and for all the poultry farmers, dairy farmers, and pig farmers who may have somewhat less glamorous stories.
