This is the final installment of a three-part article on ‘The Pros and Cons of Microfinance – A View From The Field.’ The first concentrated on the pros of microfinance and the second on the cons. This third part will describe what I deem to be the optimum conditions for successful microfinance.

The cons described in Part 2 of this article may come across as quite negative, but at Interactuar (in Antioquia, Colombia – my second Kiva Fellowship) I saw many being countered and microfinance working particularly effectively. If any microfinance critic says that microfinance does not work across the board I would challenge them to look at this MFI. Interactuar proves that it does, and with great success. However, in my opinion, it’s only able to achieve this because (compared to, say, Haiti) the environment in which it works is relatively developed.

Interactuar works on the assumption that the microloan by itself is often not enough (in terms of starting a new business). Loans need to be complimented by training and, if necessary later down the line, consultancy. Entrepreneurs looking to set up a new business may also need guidance on how to get their venture off the ground. If clients are only interested in securing a loan (and not in the range of support services) they need to prove that their business is or will be sustainable. The level of due diligence is high and, importantly, not everyone who applies for a loan will have their wish granted.

Interactuar only lends to individual entrepreneurs (not groups) after careful vetting of their business

Loan officers can afford to take their time assessing a business because loan amounts are higher and getting to the client is easy. While loans start as low as $150 Interactuar also provides loans of up to $20,000 and is not afraid to offer its clients larger loans if they have demonstrated that they pay back well and that their business is running successfully. Medellín (the capital of the state of Antioquia, where Interactuar works) has both an efficient bus system and a high-end metro service. As a result, loan officers do not need to ride into the sticks on a motorbike for 2 hours in order to meet potential clients. Loan officers at Interactuar don’t even need to attend repayment meetings. The client can walk into any local bank and repays the money by transfer. It’s incredibly efficient and means that Interactuar only needs to loan to individuals as opposed to groups.

Cooking course in one of Interactuar's on-site kitchens

The training services really are exceptional. Interactuar has its own kitchens for cooking courses, its own hair salons for beauty courses, its own bar for coffee and cocktail courses, a mock hotel room for hospitality courses and mannequins and materials for teaching tailoring. Consultancy services are exceptionally thorough and specialised consultants (mostly external) travel to the clients’ businesses to provide hours of assistance at a very affordable price. Interactuar even has its own brand design centre and a laboratory where it analyses clients’ products to ensure that they meet legal standards and are ready to go to market.

What does this add up to? Well, Interactuar’s clients boast an enormous variety of businesses, many of which are growing and many of which now employ other people in the community. A few weeks ago I visited Interactuar’s office in Yarumal, a hilly town 2 hours north of Medellín. In a single day I visited clients (only in Yarumal) that ran; an astroturf football centre; a graphic design business; an ice cream shop; an equestrian business; a hair salon; a recycling plant; a small coffee factory; a plastic bag manufacturing business; an electronics repair store and an ‘arepa’ (Colombian speciality) cafeteria. Yarumal is only a small town and Interactuar’s influence there has been profound. Not surprisingly, they’re not short of business. What this also shows is that there’s a lot to be said for concentrating your efforts as an MFI to a small(ish) area. Interactuar employs almost 300 people yet only currently operates in the state of Antioquia. It has not tried to cast its net on a national level.

Interactuar’s example shows me three things. First, don’t just loan to anyone. Second, training and ongoing assistance are essential. Third, the best breeding ground for successful microfinance is not in the third world but in areas where the economy and infrastructure are at least relatively stable.

*     *     *

So will I keep lending to borrowers on kiva.org? Absolutely. I do think microfinance works much better in some conditions than others. I’ll also take greater care in choosing who I lend to. But I also believe it’s still worth making a loan to borrowers in third world countries, if only for the positive reasons that I outlined in Part 1 of this article. Here, microfinance may have its flaws, but it often allows borrowers to manage their situations better, even if it won’t offer them or their communities a permanent solution to poverty relief.

Finally, I’d like to thank Kiva for giving me this fantastic opportunity to view microfinance in the field. It’s been fascinating.

Nick has now come to the end of his final placement as a Kiva Fellow. He’s enjoyed it thoroughly and now has to find his way back into ‘normal life’.

Want to see what a Kiva Fellow gets up to on a daily basis? Watch this video.

This is the second of a three-part article on ‘The Pros and Cons of Microfinance – A View From The Field’. The first part concentrated on the pros. The second will focus on the cons.

Most of the cons described below demonstrate one thing; microfinance assists on a micro level but is unable to affect macro-level influences. The latter are the main reason that people are impoverished in the first place.

During my time in Haiti and the Dominican Republic I generally found that there were two major obstacles that thwarted the success of microloans. The first was a lack of borrower education. While they can’t go as far as sending borrowers back to school, MFIs can certainly play a part in providing additional training. It’s not a quick win, but it’s a very effective one. Giving borrowers options of training courses in a variety of sectors allows them to broaden their horizons, pursue something they are interested in and, importantly, gives local communities a good chance of diversifying.

The second obstacle is a lack of everything that results from effective national governance: a strong economy, a functioning infrastructure, a lack of corruption.  Unfortunately, the MFI is powerless to affect these national-level influences.

Fixing the chain on the way to a repayment meeting in Haiti. Poor roads thwart borrowers and MFI loan officers alike.

If terrible road conditions prevent a borrower from traveling to the nearest large town to sell her produce in a cost-effective manner, the MFI can do nothing to change this situation. If communities have no electricity, no running water, no gas line and a terrible education system, the scope of what their people can achieve in entrepreneurial and development terms is incredibly limited.

In Haiti, more often than not borrowers would tell me that their main business challenge was a lack of frequent buyer activity. They couldn’t grow their business because people didn’t have enough money to buy their products. Practically no-one kept a strict 9 to 5 schedule because the demand wasn’t there. An MFI can’t affect a country’s economy.

My experience in the DR and Haiti (but especially in the latter) has shown me that a lot of development-focussed charity (i.e. not including medical/relief work) is pretty limited on a national level when conducted in countries lacking in infrastructure, stable economy and, above all, effective government. An honest and successful government with a clear direction is key.

If microfinance were to be successful across the board (and by success I mean real, tangible business and income growth) it would have to work on the assumption that all clients are natural entrepreneurs, or at least have a knack for making a business work. This is not the case. The fact is that most people, wherever they are in the world, are more suited to working as an employee than running their own business.

Food stall in Haiti

Furthermore, a community will not progress if it is only made up of tiny, one-man businesses. On one hand the problem is a lack of business variety. There is no benefit to a 30-family community if 10 people sell second-hand clothes and another 10 run small convenience stores. There is no benefit to the individual ‘entrepreneurs’ either. However, this is a reality. I’d say that around 90% of the borrowers I met in the DR and Haiti used their loans to invest in one of these 2 lines of business. This comes down to a lack of education, skills and knowledge of other industries. Again, I really think that this is the one offering that all MFIs should look to develop, if they have not already.

On the other hand, this also highlights a fundamental flaw of the Grameen group model, if its intention is to develop communities and society as well as the individual (often the two go hand-in-hand). The Grameen model gathers large groups of people and hands them loans to go and pursue a business practice as an individual. When I walk the streets of London I do not see a string of one-man businesses, incredibly limited in scope. I see a vast variety of businesses, ranging greatly in size, but all of which share one thing: employees. A community needs businesses of a certain size to progress.

Group lending has its pros (see Part 1 of this article) and its cons

Microfinance is supposed to promote business growth. If anything, this model is stifling it. It would be far more beneficial to all if MFIs assessed their potential borrowers and only lent to those individuals who showed enough promise to mount and grow a business to a size where they could employ other members of their community. However, such is the nature of the third world and the cost of administering loans that if MFIs in these countries did this they would not be sustainable. In this regard, I actually think the Grameen group model can be counterproductive in terms of economic development. I also think that it discourages some borrowers (especially males who are not obliged to stay at home) from venturing out of their communities to find better paid jobs at larger businesses. Simple job creation isn’t always a good thing.

One criticism I have of what I saw at Esperanza International is that loan sizes were too small. Loans generally ranged between $100 and $300 and, if borrowers repaid their loans in full and on time, they may have been granted a $50 increase on their next loan. That’s not enough to mount a serious business that’s going to go anywhere. It’s easy to say but I’d like to see MFIs like Esperanza International take a bigger risk on promising clients by offering them larger loans. I’d also like to see Kiva let its lenders share some of that risk by increasing its loan size limits. In addition, if entrepreneurs cannot inject enough cash into their business, when something goes really wrong (e.g. a farmer loses half his cattle or a borrower becomes incapacitated) then entrepreneurs may regress back to square one and lose all progress that has been made thus far.

What I saw was that most businesses were not actually growing but were just being sustained. It’s wrong to believe that all microloans will necessarily lead to business growth. I once saw a borrower on kiva.org whose profile stated that he was applying for his 18th loan. It’s unlikely that this borrower was successfully growing his business.

Finally, one of the biggest bones of contention that people have with microfinance are the ‘high’ interest rates. I won’t delve into interest rates too much because I’m sure that in most cases they’re completely justified. Kiva’s assessment of MFIs is now thorough enough that they would not become partners if they were in any way usurious.

Many people who criticise high interest rates by comparing them to what they are used to in the developed world must understand that the two are incomparable. Loan sizes in the third world are far, far smaller and so the cost of processing that loan while remaining sustainable (or indeed making a profit) is much higher. Loan officers may travel for 2 hours to disburse a loan and will have to make the same journey for every repayment meeting. Road conditions may be so bad that half of the MFI’s fleet of motorbikes will constantly be under repair. Third world petrol prices are often incredibly high. The MFI may only have very slow internet for 2 hours a day, the electricity for which is provided by a high-cost generator. Country inflation rates may be extremely bloated and these need to be accounted for.

However, interest rates are high and require a borrower’s business to be run extremely efficiently if it is to turn a profit. With that I cannot argue.

To be continued in Part 3, which will published on Wednesday May 25th, 2011.

Want to see what it’s like to be a Kiva Fellow? Watch this video.

I have now come to the end of my second placement as a Kiva Fellow. I have seen microfinance at work in two organisations – Interactuar and Esperanza International – in three different countries; Colombia, Haiti, and the Dominican Republic. My 6-month stint has been an eye-opener. It’s been fun and interesting, challenging and frustrating.

I embarked on this journey knowing very little about microfinance. I had a notion of the supposed pros and cons of this exciting, largely unproven and sometimes controversial industry but was determined to approach my time in the field with an open mind.

I’ll start by setting some expectations. First, I am no microfinance expert. I have neither a degree nor a professional background in (micro)finance. I came into this raw. Second, my experience of microfinance in the field is neither broad nor long-lived. There are thousands of Microfinance Institutions (MFIs) operating in scores of countries across the world, offering a range of services in vastly conflicting environments. Six months is arguably far too short a time to obtain hard evidence of the long-term effects of microloans.

Sampling a borrower's (Mimi's) delicious homemade passionfruit juice.

In my favour, though, I have interviewed hundreds of borrowers. True, interviews are not detailed studies. But, for the most part, I have faith in what I was told and evidence in what I saw. I also spent roughly half my time working in the MFIs’ offices. This gave me a good insight into the operational side of microfinance and allowed me to study the important question of MFI efficiency.

With these concessions in mind, I hope you find this article frank and candid. The article will be published in 3 parts. The first will concentrate on the pros of microfinance, the second on the cons, and the third on what I perceive to be the best conditions for successful microfinance.

In my first placement as a Kiva Fellow I was placed with Esperanza International, a Christian MFI with 9 branches across the Dominican Republic and 2 in Haiti. With visits of up to 100 borrowers a week (Esperanza International offers group loans, hence the high number) I soon got a feel for the pros and cons of their service.

A number of the cons were answered in my second placement with Interactuar. I saw that rigorous vetting of entrepreneurs and businesses and an exceptional training programme made a signicant difference. This should not be seen as a slight against Esperanza International. Instead, I simply think that Interactuar’s model should be the inspiration of MFIs the world over. It is the future. I also think that microfinance is most effective in the sort of environment in which Interactuar operates – poor communities within a relatively developed infrastructure – and not in the ‘third world’.

This article will centre on the pros and cons of what I witnessed during my time with Esperanza International. I have been so impressed by Interactuar that I will use its model to describe (in Part 3) where I think MFIs should be heading. I’ll also use Interactuar to discuss the optimum environment for effective microfinance.

So, let’s start with the pros. The fundamental benefit of a microloan is that it gives borrowers access to cash. Microfinance clients typically cannot open a commercial bank account. Even if they could it’s likely that the nearest ATM (if indeed ATMs readily exist – in Haiti they do not) would be miles away: many of the clients I visited lived in rural communities devoid of common amenities.

For many borrowers the only previous means of obtaining a loan was visiting the local loan shark. Here, interest rates could be as high as 300%. The inevitable consequence was crippling debt, often only paid off by borrowers’ first loans from an MFI. Microfinance critics often cite high interest rates as a major drawback. This may be true, but there’s no getting away from the fact that often the only other option is far more burdensome.

Microloans allowed Familien to rebuild his life after his home was burned down by thugs.

Microloans create choice. They allow people to switch profession and work in a field that interests them, or at least interests them more than their last job. The loans also allow them to develop a new skill. This does not necessarily lead to a higher income. However, it often means the difference between being content or being unhappy. Developing this concept further, I’ve also witnessed microloans giving people a lifeline when things go really wrong. One community I visited in the Dominican Republic had their entire village burned down by local thugs. Esperanza’s loans allowed them to rebuild, mount new businesses and start afresh.

Colombina used her microloans to start a small pig farm at the back of her house. Before she did nothing.

You may have noticed that over 80% of entrepreneurs on kiva.org are women. There’s a reason for this, and herein lies one of the great benefits of microfinance. In the Dominican Republic and Haiti women are obliged to stay at home to look after their children. The children are often numerous, ranging greatly in age, meaning that women are generally homebound for most of their adult life. Microloans allow these women to run a business out of their home. The effect is two-fold. First, it gives them something new and interesting to do. Second, it provides the family with an additional source of income.

Even in highly under-developed areas – where I am skeptical of microfinance’s ability to effectively advance a community – microloans really can make a difference to certain individuals. An example I often cite is María Lucía, a Dominican lady I met who used just 3 loans to set up three different businesses, one run by her, one by her husband and one by her daughter.

María Lucía and family. 3 loans, 3 new businesses.

While (in such under-developed areas) people like María Lucía are the exception, microfinance critics should not underestimate the difference made by the small changes afforded by a slight upturn in income. One Dominican lady I met proudly showed me the radio she bought with the profits from a corner shop set up and developed through a series of loans. The radio provided music where before it had not existed. Considering that this lady spends all day at home, that’s a massive change.

People should not be under the illusion that every microloan will haul someone out of poverty. It will not. However, what may seem like a trifling addition in a developed country can make all the difference to the world’s poor. Material possessions aside, imagine the difference between being unable and being able to pay for your child’s education. I have witnessed microloans making that difference.

I also admire the solidarity which resulted from the Grameen group model, which is employed by Esperanza International. Not only does it promote responsibility, organisation and accountability (members have to pledge for each other in the event that one person cannot make a payment) it also brings people together in a social setting. Again, for women who are typically tied to their house and children, group repayment meetings are a fun and stimulating occasion.

Finally, Esperanza International does not only provide microcredit but also a selection of wrap-around services, such as insurance, a savings account, healthcare and recreational activities. These are all very important services (healthcare especially) to which the borrower had no previous access. When critics cite high interest rates, they should be aware that these services are often included ‘in the price’.

To be continued in Part 2, which will published on Tuesday May 24th, 2011.

Want to see what it’s like to be a Kiva Fellow? Watch this video.

Kiva's microfinance partners often provide services beyond finance, including housing (pictured above in Colombia), education, energy, agriculture, hospitality, business, women's rights, community, and culture.

Another week, another incredible range of dispatches from around the world. Several Fellows told their stories with video and pictures while others took time to reflect on the state of microfinance as a global industry and in their respective countries. And what would a week in the field be without getting to know a few borrowers? Plus, scroll to the end of the post for pictures you may have missed the first time around.

Video Blog – The Life Of A Kiva Fellow
Country: Dominican Republic, Haiti, Colombia / Fellow: Nick Hamilton (KF13, KF14)
Need a break from reading about what Kiva Fellows do? Then watch Nick’s video for a fun yet informative overview. (Don’t let the opening scenes on the beach fool you – being a Kiva Fellow is a lot of work.)

Video Blog: The Story of Lini Nanyonga
Country: Uganda / Fellow: Nila Uthayakumar (KF14)
Nila introduces us to Lini Nanyonga, a microfinance client in Uganda. Learn more about her business, how she used her loan, and her hopes for the future in this short video.

A Kiva Fellow’s Photo Album: Six Months Along The Equator
Country: Ecuador, Kenya / Fellow: Tara Capsuto (KF12, KF13)
Tara tries to find the words to describe her Kiva Fellowships but ends up letting photos of local foods, finding borrowers, hanging with Kiva Coordinators, and much more speak for themselves.

Ten interviews with Mongolian entrepreneurs
Country: Mongolia / Fellow: Amber Barger (KF14)
Be sure to click on each picture in Amber’s post for business updates from a meat saleswoman, a painter, a cook, a car repairman/builder of low-income housing, and five other borrowers.

Participating in the Dialogue: The Role of Microfinance Critics (Part 2)
Country: Bolivia / Fellow: Julie Shea (KF13)
Julie responds to some of the controversial statements being made about microfinance with the story of CIDRE, the microfinance institution she’s been working with in Bolivia, and a round-up of related links.

Kiva Field Partners: More than just microfinance
Country: Colombia / Fellow: John Gwillim (KF14)
As John details in his post, Kiva’s partners often provide services well outside the scope of traditional microfinance. In addition to examples from Colombia, read more about programs in Ghana, Paraguay, and Peru.

Money, Money, Everywhere
Country: Benin / Fellow: Gareth Davies (KF14)
Gareth makes thoughtful and stirring connections between Samuel Coleridge’s “Rime of the Ancient Mariner” and economic activity in Benin.

Mountains Beyond Mountains: The Landscape of Microfinance in Nepal
Country: Nepal / Fellow: Claudine Emeott (KF14)
Access to finance and microfinance in Nepal is directly related to geography – the higher you climb, the fewer the options. Claudine lays out the current situation while pointing to some promising developments.

The Highland Commute
Country: Guatemala / Fellow: Gustavo Visalli (KF14)
Gustavo gives us a taste of his daily commute in Guatemala. Find out how he survives “The Sardine Act”, “The Highway Shoulder Hike”, and “El Carnicero” (aka “The Butcher”).

Cindy’s Baptism by Onions
Country: Nicaragua / Fellow: Karen Gray (KF14)
The first visit to the field is just as exciting for new microfinance staff as it is for Kiva Fellows. While there are always challenges (often related to transportation), there can be unexpected surprises, too.

Microfinance Marketing 101: The Loan Officer
Country: Cambodia / Fellow: Stephanie Sibal (KF14)
As Stephanie writes, loan officers not only tackle on-the-ground PR for a microfinance organization, they also play an essential role in marketing, customer service, product feedback, and, of course, loan administration.

~
Previous updates from the field:
“Christmas”, Trekking, Adversity + Good Company
~

Plus more pictures from this past week:

Nicaragua (by Karen Gray)

Guatemala (by Gustavo Visalli)

Kenya (by Tara Capsuto)

Bolivia (by Julie Shea)

Mongolia (by Amber Barger)

Nepal (by Claudine Emeott)

Around the world, Kiva Fellows are celebrating the start of 2011 in all sorts of different ways. Here’s what some KF13-ers are doing to ring in the New Year.

Enjoy and Happy 2011!

Ellen Willems, Ecuador

Ecuadorians, as I was told, celebrate the coming of the New Year, and more importantly the going of the “Old Year” by making “monigotes”. These are dolls made of old clothes, stuffed with newspapers or sawdust and sometimes with fireworks as well. They have masks made of papier maché. The monigotes represent the “Viejo” or Old Year and all the bad things that happened during that year. On New Year’s Eve these monigotes are burnt in the streets.

New Year’s Eve, as well as Christmas, is a holiday that is mostly celebrated with family. And traditionally all the family members work together to make the monigotes. In San José de Chimbo, the small mountain village where I am currently living, a judge, accompanied by the local band, goes around town to look at all the monigotes and to select the three most original ones.

Cooperativa San José will close its doors early on Friday and kick off the New Year’s Eve festivities with an office party and its own monigote. I am sure that for me 2011 will start with a Big Bang because San José de Chimbo is known throughout the area as a mayor fireworks producer!

Ellen with monigotes at Cooperativa San José

Betsy McCormick, Colombia

Two fun Colombian traditions to speak of:

1. People in Medellin wear yellow underwear on New Year’s Eve because it’s supposed to bring good luck.

2. At midnight, people run around the block toting empty suitcases behind them. This is supposed to bring travel in the new year.

Abhishek Banerjee, Armenia

New Year’s Eve, similar to Christmas, is a holiday celebrated mostly with family. I have been told that generally, families get together for NYE to eat and drink. However, after midnight, many families then leave home and go visit their friends and neighbors, eat and drink some more and occasionally burst into dance. As a country that stays up into the late hours of the night quite often, this doesn’t surprise me.

On a side note, Armenians follow the Gregorian calendar and their Christmas falls on the 6th of January. As a result, 30th Dec – 10th Jan is basically the time off for all offices and banks. SEF will also be closed till the 10th of Jan.

Personally, I am taking this long break as an excuse to fly out to Europe and ring in the new year with some old friends!

Julie Shea, Bolivia

Bolivians typically eat New Years Eve dinner with their families, after which the young people head off to parties with their friends. At midnight they eat 12 grapes each, presumably to represent each month of the coming year. Echoing the Colombian traditions (above), many people will walk around the block with a suitcase, which is supposed to bring travel in the new year. The women wear red underwear if they want love in the new year, yellow underwear for money. At 6AM when the parties are ending, everyone goes out for Fricasé, a traditional pork dish.

Tara Capsuto, Kenya

Christmas and New Years is a time when many Nairobians pack into overcrowded taxi-vans and buses and head home to their villages – where they have their ancestral roots — to celebrate the festive season with family and friends.  Rising urbanization, especially over the last 30 years spawned the tradition of going home for the holiday. The capital city, renowned for terrible traffic, literally emptied out by December 24th. For both Christmas and New Years the tradition is to slaughter and roast a goat, which can be bought for 3,000Ksh ($37USD), or selected from the pasture for those families fortunate to have their own shamba (farm in Kiswahili).  I’ll be celebrating New Years in Zanzibar, Tanzania with some new friends!

Nick Hamilton, Dominican Republic

Dominicans celebrate New Year’s Eve in the same way that they celebrate Christmas, which is actually celebrated on Christmas Eve. It’s a time for families to get together and sit around a dinner table feasting on meat, rice, meat and more meat. Once they have seen in the New Year the young at heart will then go out and party until the early hours.

Having spent Christmas with my host family, I actually travelled to a beach resort called Cabarete with some friends and saw in the New Year there. We were a group of Argentinians, Italians, Dominicans and a Brit (that’s me) and so we actually celebrated New Year four different times for each country over a 5 hour period, which was lots of fun!

Amber Barger, Mongolia

Mongolians traditionally ring in the New Year during the last two weeks of December. Each evening, different organizations hold their annual New Year’s parties to celebrate achievements during the past year and to create a sense of motivation and community for the next year. Christmas and New Year celebrations are commonly thought to be the same holiday by many Mongolians. At New Year’s parties you’ll find Santa Claus and his scantily-clad snow girls playing silly games. The attendees will be charmed with an intertwining of live singing, dancing, and award –giving. All of this entertainment plus alcoholic beverages and dinner are included in the usual entry fee averaging anywhere from $25-85 USD per party. If you’re involved in many organizations, you’ll be expected to attend multiple New Year’s parties each year. Ladies are sure to wear their glittery dresses and men wear their nice suits or traditional deels.

On the actual New Year’s Eve, though, it’s a family affair, as it’s a common view that if you aren’t home with your family on New Year’s Eve, then you won’t be home for most of the next year. The President of Mongolia normally gives a speech around midnight and the family members gather around the television to watch this.

Santa and his elves

When Julie Ross (Kiva Fellows Program Manager) asked what I would find most challenging about a Kiva Fellowship I think my first response was ‘not being at home for Christmas’.

I LOVE Christmas. Many people think that it has become too commercialized. Not me. I’m not ashamed to say that I’ll never tire of the protracted build up; the pomp; the ceremony; the tremendous effort that goes into making this one day special. 70s rock band Wizard sang ‘I wish it could be Christmas every day’. Although this may seem a little over-the-top, when the festive season kicks in I find myself in wholehearted agreement.

Things are a little different in the Dominican Republic. While Dominicans still put up Christmas trees and plastic Santas adorn the odd front door, the excitement ends there. There is little-to-no media build up (at the moment Dominican media coverage is understandably focused on broadcasting advice about cholera prevention) and I have the feeling that Christmas day will simply come and go. So I don’t mind saying that this is the time when I’d most like to be at home with my family.

That said, I’m doing my best to stay festive. A couple of weeks ago I found myself without internet for three days. Determined not to let this beat me (internet is often pretty essential for a Kiva Fellow) I tried to think of ways to stay productive. Naturally, the first idea that came into my head was to write a Kiva Christmas song. I say ‘write’ but my musical ability is pretty much nil. What I actually mean is ‘re-write’. In 1987 legendary Irish band The Pogues released the greatest Christmas song of all time, ‘Fairytale of New York’. I decided to re-write the lyrics of this song to reflect Kiva’s mission and hopefully encourage people to lend.

‘The greatest Christmas song of all time?’ you may ask. When I informed the other Kiva Fellows that I’d re-written this song the overwhelming response was ‘I’ve never heard it’. What?! On reading this it felt as if a small part of me had slowly died inside. I had no idea that this song was not a worldwide phenomenon. As British people only represent a small demographic in Kiva’s ballooning membership, I now assume that most readers of this post may not have heard Slade’s ‘Merry Xmas Everybody’, Shakin’ Stevens’ ‘Merry Christmas Everyone’, Jona Lewie’s ‘Stop the Cavalry’ and the aforementioned thumper by Wizard. Please look them up. They will change your life. Maybe.

Okay, enough of the British Christmas song push. I’d re-written the lyrics to ‘Fairytale of New York’ and was not about to change them because The Chipmunk Song had a wider fan base. I knew that I would not have enough quality film and photo footage from the Dominican Republic to fill the video so called on the rest of the Kiva Fellows for assistance. As expected, the Fellows came up trumps and sent me hoards of emails full of brilliant footage, and I became excited about what could be.

But who on earth was going to play the song? I sent an email to a good friend of mine, Alex Singerman, and he said that he’d give it a shot. Alex asked a couple of his friends, Kerri Hall and Laurie Carter, to help him come up with the track and they set to work. On 15th December Alex sent me the song. I couldn’t believe how great it sounded and was unbelievably grateful. I set about fitting the Fellows’ footage around the track and, after much editing, finally published it on Youtube the following day.

So here it is. I hope you like it! If you do, please consider posting it on Facebook (if you’re on Facebook), tweeting it (if you’re on Twitter) or including it in your blog. My (maybe ambitious) aim is to reach a 5-figure viewing number by Christmas day. While I’ll be extremely chuffed if that is achieved, if this video encourages anyone to log on to kiva.org and make their first loan it will all have been worthwhile.

Click on this link or the thumbnail to view the video.

Merry Christmas!

By Nick Hamilton, KF13. Nick is serving as a Kiva Fellow with Esperanza International in the Dominican Republic and Haiti

Before beginning my placement as a Kiva Fellow, I tended to view the Kiva model simply in terms of members lending to borrowers and borrowers paying back. It was hard to envisage the intricacies of an Field Partner’s (or MFI) operations and what goes into facilitating a loan. In my eyes the MFI was the middle man; an amorphous mass that made things happen. Of course, the simple fact is that without MFIs Kiva would not exist. They share an equal responsibility with the lenders and the borrowers in ensuring that Kiva’s mission – ‘to connect people, through lending, for the sake of alleviating poverty’ – is achieved.

It goes without saying that every function of an MFI (whether it be management, IT, finance, administration etc.) plays an essential role in the organisation’s existence. However, here I would like to pay special tribute to the people with whom I spend the majority of my time: the loan officers.

An MFI’s loan officers are the people that deal with loans and borrowers on the ground. At Esperanza International (Kiva’s field partner in the Dominican Republic and Haiti) the majority of the loan officers’ time is spent in the field conducting borrower (or ‘Solidarity Bank’) meetings. For the most part, this is to collect repayments, which in Esperanza’s case occurs on a biweekly basis. They may also use the meeting to train or educate the borrowers and, as Esperanza International is a Christian organisation, share the word of God. Esperanza’s loan officers are also required to go out to the field to speak to potential new clients about the MFI’s services and, more often than not, bring them on board. While at Esperanza International borrowers come to the office to receive their loans (this process is either run by the Branch Manager or the Branch ‘Supervisor’) at other MFIs loan officers travel out to the field to disburse loans as well.

I have spent a lot of time with a number of the loan officers here in the Dominican Republic and it’s been a pleasure to work with them all. There are some characteristics that are necessarily common to the role – loan officers have to be personable, confident and natural communicators – but I’ve also met a great bunch of individuals. Each purveys an interesting, likable and very fun personality and I’ve loved getting to know their individual quirks.

What I’ve found especially interesting is the way that each loan officer runs their biweekly repayment meetings and, in particular, controls a large group of loquacious borrowers. Some of the (especially younger) loan officers are particularly jaunty and keep the borrowers’ attention fixed on them by skipping around a room with abounding energy. Others will just keep raising their decibel levels until no-one else can be heard. One loan officer uses a technique which I always found particularly effective at high school. If a meeting is getting a bit boisterous (which happens quite regularly with a room full of 40 chatty Dominican women) he just stops talking and sits with his head bowed in silence until everyone looks around and shuts up! When it comes to dealing with large groups and public communication I have learnt a lot from these people. Just as impressive (and touching), of course, is the personal relationship that the loan officers share with each borrower, even though they may have hundreds ‘on their books’.

Rather than ramble on about a loan officer’s role in the 3rd person, I thought it would be much better to let them do the talking. So, without further ado, I’d like to present ‘Loan Officers – Kiva’s Unsung Heroes’:

Click on this link or the thumbnail to watch the video.

By Nick Hamilton, KF13. Nick is serving as a Kiva Fellow with Esperanza International in the Dominican Republic and Haiti

Want to become a member of ‘Team Esperanza – DR and Haiti’? Click here

By Nick Hamilton, KF13, Dominican Republic and Haiti

Having spent a lot of time speaking with borrowers during the week, I decided to spend Friday in the office. Kiva Fellows are required to complete an extensive list of ‘deliverables’ and I was aware that I still had a lot to deliver. I had just begun editing a short film when I was approached by Noberto, Esperanza International’s Kiva Coordinator.

“Fancy observing one of Esperanza’s health workers in the field? It’s one of the services we provide and you haven’t seen it yet. I thought you might want to go.”

“Err, yes please. That would be great,” I answered reluctantly, knowing I’d be losing another day of office work to the field. Saturday had just taken Friday’s place.

I jumped into the truck and we set off for a small community about 30km east of Santo Domingo. There I observed the health worker’s opening address but didn’t actually witness any check-ups. Naturally, these were conducted behind closed doors. While I was waiting I got chatting to Luisa, one of the members of the Solidarity Bank.

Luisa had been elected President of the Bank and it wasn’t hard to see why. She came across as smart, driven, proud and ebullient; passionate about her own progress but attentive to the welfare of others. As I quizzed her about life before microloans Luisa answered my questions with a sparkle in her eye, evidently grateful for the benefits that the loans have afforded her community.

“The loans have helped a lot. Before, many people had nothing to do. Now they run their own businesses.”

“The loans have given women a practical way of earning money. We can now run businesses out of our homes.”

Luisa was anxious to talk about what makes her tick – business. She has taken out 3 loans and invested each into a different venture. One run by her, one by her husband and a third by her daughter. I found this pretty impressive, especially considering that she received her first loan less than 18 months earlier.

While the ladies at the Bank were receiving their check-ups, Luisa led me to her house to show me her businesses. When I arrived I was greeted at the door by her husband, Martín, a jovial man who led me in, sat me down and handed me a cup of coffee with a beaming grin. We were then joined by their daughter, Luisa María, a pretty girl of 19 who appeared quiet at first but soon opened up with a radiant smile when we began discussing her business. I knew I was going to like this family.

The photo above portrays Luisa, Martín and Luisa María standing next to their respective businesses.

Luisa’s first loan was used to purchase a computer, modem, printer and photocopier. She noticed that this was something that didn’t exist in her community and that people – especially youngsters – were having to travel a long way to use the internet or print something off. Luisa asked her son to teach her the basics of using a computer and connecting to the internet, and off she went. I enjoyed listening to Luisa talk about how this has helped the community:

“True, people can now chat to their friends over the internet, but it also really helps the children to complete their schoolwork.”

What’s not shown in this photograph is the extent to which this enterprise has grown. Luisa now has two PC’s connected to the internet and four television monitors hooked up to games consoles. An enormous painting of Super Mario on the wall outside beckons children in to play on the Nintendo GameCube. The business has grown significantly over a short period of time but Luisa admits that the profits of the other two businesses have played their part.

The second loan was used to invest in Martín’s business, the resale of Amway (health and beauty) products. A few of these are positioned on the chair in front of Martín in the photo. As Martín described the relative benefits of his product suite in fine detail, I was impressed by how much he had learnt. He really knew his stuff. I was quite surprised that people would pay the hefty asking price but, as he showed me his ample client list, I understood either that Martín was a very good salesman or that his customers saw great benefit in the products on offer. After speaking to a couple of Martín’s customers, I actually think it was a bit of both.

Luisa’s third loan was used to set up her daughter’s fingernail design business. This comprised of manicure, faux fingernails and nail polish design. Luisa María brimmed with pride and passion as she spoke about her art, and art it was. I could not believe the elaborate intricacy of the designs on offer. I was so impressed that I asked (as a joke!) whether she’d add me to her waiting list. “Ha ha, can you imagine! That would just be embarrassing!” was her laconic reply. Luisa María had to complete a 4-month course to become qualified in fingernail design, and her certificates can be seen behind the nail varnishes in the photograph.

So what of the future? Well, the family were enthusiastic about continuing to expand their businesses and Luisa said she would be taking out a fourth loan to pay for repairs on their roof. I asked Luisa about her long-term aspirations. Her reply was one that I hadn’t yet heard from any of the borrowers I’d met previously:

“I want to buy a vehicle so that we can travel around the country. There’s so much I want to see.”

“And do you think that you’ll achieve this dream?” I asked.

“Of course!” she responded confidently. I don’t doubt it one bit.

So far, my experience in the DR has shown me that microfinance has its limitations. It’s not always a perfect solution and I often see cases where microloans simply help people to sustain, as opposed to grow, their businesses (which is much better than having no business at all!). But Luisa’s story is one of unbridled success. The loans have allowed her family to found and grow not one but three businesses at a startling rate. And what’s more,  Luisa, Luisa María and Martín all love what they do. They talk about their businesses with an infectious pride. I too left their house feeling very proud, proud to be working for an organisation that can effect such positive change.

After a couple of hours we headed back to the office in San Pedro. As we motored along through the dusty sun I sat gazing out of the window, brimming with a smile that remained painted on my face throughout the weekend.

By Nick Hamilton, KF13. Nick is serving as a Kiva Fellow with Esperanza International in the Dominican Republic and Haiti

Want to become a member of ‘Team Esperanza – DR and Haiti’? Click here.

Okay, it wasn’t quite that simple. I actually did quite a lot of research into the Dominican Republic. I thought that it sounded like a fascinating country with a large demographic that could really benefit from microfinance. In addition, Kiva had asked me to work with Esperanza International – Kiva’s field partner on the island of Hispaniola – to develop presence in Haiti. Here, extensive research was not necessary. There was no shortage of publicity surrounding Haiti’s terrible plight and I was glad to accept a fellowship in a country that deserved all the support it could get.

Paradise Found, Paradise Lost

I arrived in the Dominican Republic ten days before the start of my placement. After spending a couple of days in Santo Domingo – the DR’s rumbustious capital – I jumped on a bus and headed to the Samaná Peninsula. I wasn’t disappointed. While a boat ride or long trek were required to reach the most beautiful beaches, I would either find myself in the company of a few or completely alone. My days were spent alternating between reading my book and swimming in the sea. It was bliss, and the Google Image imprinted on my mind had lived up to expectations.

After a week at the beach I travelled back to Santo Domingo to begin my Fellowship. From that point on, my paradisiacal image of the DR began to subside. But not in a bad way. I haven’t been here long – 3 weeks in the country and 2 weeks on placement – but the best thing about my time so far has been the surprises, the unexpected.

Esperanza International welcomed me with open arms. I spent two days at their headquarters in Santo Domingo before moving to my current location, San Pedro de Macorís, a ‘working town’ located in the south-east of the country. In Santo Domingo, it was the roads that took the most getting-used-to. On previous trips I’ve visited cities where the traffic seemed particularly manic (Bangkok springs to mind), but Santo Domingo really takes the biscuit. Not only do all forms of transport seem dangerously overcrowded but the ‘rules’ of the road appear paradoxically lawless.

I arrived at Esperanza International’s San Pedro branch on Wednesday morning. San Pedro does not appear on the first page of Google Images. My guess is that you’d have to scroll through about 100 pages to come across it. Actually, I doubt it would appear at all. But I love it here. San Pedro is a loud, throbbing, dusty market town thronged with cluttered stalls and swerving, reckless traffic. The stuffy daytime air is dominated by the raucous buzz of rattling motorbikes while barking dogs and the odd confused cockerel assume control at night. A shortage of running water is a real issue and mass electricity outages occur on a daily basis. In almost 2 weeks in San Pedro I haven’t encountered a single tourist. I don’t think that’s likely to change. This, for me, is the real Dominican Republic.

Group Loans

Borrowers at a repayment meeting

I hadn’t realised that the vast majority of Esperanza’s clients are not individuals but large groups, or ‘Solidarity Banks’. Bank size ranges from 10 to 40 members and they are predominantly made up of women. To make things easier, Banks are sub-divided into ‘Groups’ of 4 or 5 people. Often, when an Esperanza loan appears on Kiva.org the group will be one or more of these Groups as opposed to the entire Bank.

I assumed that individual loans prevailed at Esperanza because group loans only tend to make up around 10 to 30 percent of the total loan portfolio on Kiva.org.* Of course, this figure is somewhat misleading. Assume that there are a minimum of 4 borrowers per group (there are often many more) and you realise that, more often than not, group loans constitute more Kiva borrowers than are represented by individuals on the site.

Despite applying for a loan as a group, the request of each member of a Solidarity Bank should be seen on an individual, case-by-case basis. Individual loan amounts may vary significantly. While one member may be taking out his first loan another may be on her fifth. The members will likely be investing in different types of business. Each member will be hoping to use the loan to overcome his/her own list of challenges. Each member will have a personal set of aspirations for the future.

In the short time I’ve been working at Esperanza, the advantages of the group loan model have become clear. It’s an efficient way of distributing loans and collecting repayments. For the latter, Esperanza’s loan officers travel out to the field to meet with Banks on a biweekly basis. For loan disbursement, Esperanza actually asks that Bank members travel to the office to receive their loan, a journey that can exceed 30km for those borrowers in the San Pedro region. As such, I’ve been able to explain Kiva to borrowers by logging on to the site and taking them through it, something that would not be possible in the field.  For those borrowers who have already appeared on Kiva.org, it’s been great to log on and show them their loan profile and the Kiva members who funded their loan.

A borrower admiring her loan profile on Kiva.org

Loaning to a Bank also means that delinquency rate is low. Esperanza’s Kiva clients currently have a 100% repayment record and only a 3.17% delinquency rate. The reason for this is that if a borrower has not managed to raise the necessary funds for a scheduled repayment, the other members of the Bank (or, more likely, of his/her Group) are expected to cover the loan. And they do. If they do not, members know this could jeopardize their chance of securing a future loan. This does not stigmatize Bank members. Rather, its effect is one of bolstering solidarity. Finally, Bank meetings provide a great platform for loan officers to train, educate or communicate a timely message. Over the past two weeks, loan officers at Esperanza have used Bank meetings to educate on how to protect against cholera.

There is one obvious drawback. While Bank meetings are rarely dull, they can take a LONG time. Borrowers often have to walk a long way to get to a meeting and have a propensity only to set off when the loan officer arrives! Borrowers wait until the meeting to hand their designated group coordinator what they owe, and as money is passed around the room things can get extremely confusing and squabbling can occur. Also, Dominican ladies love to chat! If one member starts off on a tangent it can take the loan officer a long time to get everyone refocused on the matter in hand. As a result, if a loan officer has 4 meetings in a day, you can bet that the last meeting will start a lot later than planned.

The ability to provide loans to individual clients is important though, and Esperanza provides this service as well. More often than not a borrower approaches Esperanza as an individual because they require a larger loan than is usually offered to members of a Solidarity Bank. Often, these individuals began borrowing as part of a Bank and then left to secure a larger loan. However, there will also be occasions when there may not be a Bank in the vicinity or the individual cannot join a Bank or attend the obligatory meetings due to personal circumstance.

Microfinance creating choice

It’s far too early for me to make any definitive judgement on the effectiveness of microfinance. That said, my preconception has already changed. Previously, I saw the benefits of microfinance mainly in terms of business growth. This, in turn, would mean the borrower could afford a more comfortable life for him/her and his/her family. As it happens, business growth is just not straightforward and other – often unforeseen – factors need to be considered. It’s wrong to think that successive microloans will always mean that a borrower can continue to grow his meagre street stall into a busy shop.

The real positive that I’ve witnessed so far is that microfinance gives borrowers a choice. One borrower I met used to work in a kitchen but, being asthmatic, the fumes from the stoves were having a degenerative effect on her health. She used her loan to set up a beauty salon and is now much happier as a result. Another borrower used to sell food but was losing money because customers who bought on credit (due to not having sufficient money at the time) were not paying her back. She used her loan to set up a fruit juice business. She much prefers making fruit juice and does not lose out because customers can always pay the full, lesser amount up front. I’ve been most touched by a borrower who lost everything when his house burnt down and used a loan to get back on his feet.

Microloans enabled Familien to rebuild his business after he lost everything in a fire

I’m really looking forward to the rest of my Fellowship and further unexpected surprises. For those of you wondering about Haiti, I’m going to remain in the Dominican Republic for the time being. I’ll be monitoring the cholera situation and will also be paying close attention to the presidential elections on November 28th.

I’ve talked a lot about pleasant surprises, altered perceptions and discovering the real Dominican Republic. That said, you can be sure that I’ll be heading back to my paradisiacal beaches come the weekend.

* I arrived at this statistic through random viewings of the site and is therefore only a rough figure.

By Nick Hamilton, KF13. Nick is serving as a Kiva Fellow with Esperanza International in the Dominican Republic and Haiti

Want to become a member of ‘Team Esperanza – DR and Haiti’? Click here.

One of the aspects of microfinance that is often overlooked when arguing about the interest rates charged to borrowers, or sustainability of microfinance institutions, is the actual cost of giving a financial service to the most isolated communities. I thought I would tell about my latest visit to a group of borrowers, so you would be able to picture it.

Reaching the group was pretty hard, and would have been impossible without the loan officers’ field knowledge. After taking a 25 Pesos ride with a “carro publico” , or public taxi (read 8 person stuck in a little car)  to the closest paved area, we had to take a 100 Pesos “motoconcho” ride , or motorcycle taxi on a dust road, and eventually finish by foot when the path was too muddy (I have been considering adding my shoes to the transport bill). The group of 15 borrowers that we met had a 110000 Pesos loan (roughly 3000 USD, about 200USD each), divided into 12 installments of about 10000 Pesos. Unfortunately, the group members have been running late on their payment, due to a very strong slow down of the local economy, and the loan officer was only able to retrieve 2350 Pesos (about 65 USD).

So let’s make the balance: 500 pesos (14 USD) spent just on transportation for the round trip for the loan officer and I, to be compared with the 2350 Pesos recovered from the loan. Adding up transportation and actual meeting time, the operation took almost 4 hours. Indeed, my own expenses as a Kiva Fellow are to be excluded from the balance, and not every reunion end up with cases of delinquency. This meeting was actually the first one I witnessed that ended up with an incomplete repayment (out of an approximate amount of 60 visits). However, it just describes the challenges for Kiva’s field partners to stick their goals of serving the neediest and reach financial sustainability.

One could wonder what is the point of disbursing loans in such remote areas. The community I visited that day is the typical example of isolated one (the fare to get to the closest village is just ridiculously high compared with people’s standard of living), where economical opportunities seem so scarce that one has to be really imaginative and committed to make some profitable business out of a microloan. Many of the women of the group had 6, 7 or 8 children, and dozens of grandchildren, and in the sanitary conditions they live, the loan amount is likely to be eventually used for higher priorities than business.

However, this is a fundamental point of microfinance. Providing financial services in the areas where no other means to develop an income generating activity exist. It is definitely riskier and more labor intensive than stock-exchange, and you could argue that rather than microloans, the community might more hardly need basic infrastructures such as roads, reliable electricity, or draining system. However, it was worth the attempt for those of the borrowers within the group, about half of them, who were able to pay their loan on time and are eager to see the current issue resolved so they can take a new loan and move forward.

When I talked with the MFI’s director in the main office about the fact that after 10 years of operation, the institution hasn’t yet reached sustainability and relies on external donors, he told me “Of course, I wish I had better financial results, and it is part of our objectives, but the one objective I will always pursue is to make microcredit that impact the poorest”. The loan officer I traveled with could have chosen to disburse loans to the people of the village that we reached by “carro publico” and decrease both operational cost and financial risk, but he intentionally prospected in the remote community instead, because the real mission of Esperanza is to reach the poorest.

Dominican Republic, as many developing country is highly depending on global economy’s health, because it imports almost all it consumes, and its two main sources of national income are tourism and remittances. Therefore, the country has been strongly affected by the global economical crisis and hardly reaches stability. The current market’s average interest rate is 24%, and Esperanza has to borrow part of its capital at such price, because Dominican laws make it impossible for them to use its clients’ savings to disburse loans (such as credit unions do)

Moreover, the MFI faces intense concurrence for SMEs financing. I have happened to talk several times with Esperanza’s clients, who were starting to have a steady and successful business and were turning towards other bigger institutions or commercial banks that could offer them higher amounts of loans with slightly lower interest rates, or longer terms. At first, I interpreted this fact as one of microfinance achievements: including the poor and formerly excluded into the financial system. I now begin to realize that it also represents a loss for Esperanza, or a non-return on the time and money invested to reach the poorest and more isolated and help some of them creating profitable businesses.

Kiva’s field partners are facing many challenges to carry on both financially sustainable and socially beneficial activities. Money lent by Kiva users is an innovative and highly valuable way to help them address these challenges and reach their goals. Please, continue lending on Kiva.

*******************************************************************************

Esperanza has its own lender’s team. Check it out.

I am quite a picky person when it comes about writing. I really make it a point to write as properly as possible, even in a non-native language. Therefore, when I am writing an entry for the Kivafellows blog, I use to plan it, prepare a draft, then write it in French (my native language), spend a lot of time trying to translate it in English, and then I hand it to Gemma, another Kiva Fellow, who corrects my English text and make it look like if it had been written by a native speaker. However, this time I felt like I would try to write in English directly, without taking too many looks at dictionaries and losing some spontaneity in the writing and translating process (I hope it won’t hurt the language purists in my kind!). I must say that I was also incited to do so as I read the articles of Kanae, Kiva Fellow alumni, who wasn’t a native English speaker either and wrote excellent blogs.

For the last four days, I couldn’t help but thinking that the group meeting I had attended last Friday was a perfect example of all that I have learned about microfinance, since I started my fellowship with the MFI Esperanza, and thus I would have to share it. Here is a short video shot during this meeting and sent as a journal update.

So let’s draw the setup. I was planning to meet a group of borrowers, funded on Kiva, to realize some Kiva work (journal updates for some, and verification for others). The group meeting was taking place in Boca Chica, a pretty famous touristic place of the Dominican Republic. Boca Chica is quite far from the nearest branch office and loan officers’ schedule are really tight, so I had to manage to get to the town on my own. After a one hour long ride bus, and asking the bus driver to stop when I thought I was getting to the place I had been previously described (bus have no official stops in the country, you just have to ask the bus driver to drop you off), I met with Alejandro, the loan officer, who took me on his motorcycle to get to the group meeting.

One can hardly believe that the community where the group was meeting is in the same area as the tourism resorts that stand not too far. Dust and muddy roads, houses made of wood and tin roof, which look like they are about to collapse, garbage everywhere and kids playing around … I am not trying to make you have pity for the borrowers, because as I start talking with them, I often find out that living conditions are not as bad as they look form outside and people often find very smart ways to cope with the situation, but the difference between the borrowers’ community and the luxury resorts always strikes me.

Six groups of five borrowers were meeting this day to pay one of their loan installments. As it happens many times, and especially with large groups whose loans started a long time ago, not all borrowers were on time at the meeting. During the two months I spent here, I have realized that although borrowers are quite excited about the first steps of the loan (getting the money of course, and paying the first two or three installments), their motivation decreases, and their participation and attendance is much less regular towards the end. However, Alejandro (loan officer) is just unbelievably committed to his task and puts a lot of energy to remotivate the groups, and have them be responsible and supportive to one another. Esperanza’s policy is that loan officers do not leave the community until they get a complete repayment from the group (otherwise the installment is counted as defaulted for the whole group) and I have happened to stay almost five hours with a loan officer, waiting for a group to find a solution to get a complete repayment. However, I noticed that the best motivation for a group to fulfill with its payments on time is when all the members are planning to request another loan. That has been the case of about 80% of the borrowers I have interviewed, which also demonstrates in my opinion both successes and limits of microfinance (Borrowers have found it profitable to borrow so they want to do it again, but they still don’t manage to break the cycle of borrowing money to develop their activity)

Eventually, all members showed up, or sent someone to give the repayment. Some had just had a hard time gathering the money for a repayment. As most of borrowers’ businesses work on credit, the meetings that take place just before the day when administration employees and construction workers get their paycheck are always the most difficult ones. Other borrowers simply had commitments that made it hard for them to get on time (like this pre-school teacher who came with five young children). When asking the borrowers what they like and dislike with the MFI Esperanza, I have been told several times that it is not convenient for them to attend these bimonthly meetings, even if they take place in their neighborhood. This is one of microfinance realities: When you are paying back a loan from a commercial bank, everything is digitalized and you don’t have to worry about anything. At most, you need to make a bank transfer or send a check…but try to imagine if your banker was coming to your place every two weeks, gathering other clients living near by, and led a two hours long meeting for the only purpose of paying one of the several installments scheduled for your loan! However, these meetings are a fundamental part of the microfinance process. The lack of technological means to process the bank transfers is not the only reason: in environments where people are not used to be given responsibilities, and might be appealed to use the loan amount for other purposes, borrowers often need to be reminded that the only way to make this opportunity profitable for them is to invest in a business activity (be it formal or informal)

Considering this last point, Esperanza, as certainly many other MFIs, strive to make the most of these indispensable meetings to provide other services to their clients, on both social and financial fronts. During this reunion, several borrowers came to talk to the loan officer about requesting a housing loan (Esperanza has a special loan product for housing purposes, with longer terms and lower interest rates, along with construction council), requesting an individual loan (for clients with a good repayment history) or asking to repay their loan earlier in order to take a new one. Some social services are also provided: It is not uncommon that loan officers ask about the borrower’s health and give them a ride to a partner clinic where they have free access as members of the MFI.

However, not every borrower draws benefits from their loan. Most cases of delinquency, often results of either life uncertainties, unfortunate events, or a misuse of the loan: the money was not invested in a business, sometimes lent to another family member, or it was not invested in a profitable way, and the borrowers stay with the burden of paying the installments every two weeks.

Religion is also very present during these meetings and in Dominican life in general. Once all members have gathered, a short prayer is tol commitments to the institution (Ed, often followed by a religious song. Religion is a vector of unity within the group and reinforces borrowers’speranza is a catholic institution). Entrepreneurs grant their repayment success to God, and for many of them, the whole process of getting a loan and try to carry out a business in order to support their family, only makes sense when considered under the point of view of religion.

Going back to the sequence of events of this particular meeting; Alejandro, the loan officer eventually collected all the repayment vouchers form the borrowers, at the exception of a few repayments made by cash. For the groups of borrowers living far from the branch office, and with an easy access to a bank, repayments are collected through vouchers, in order to make the loan officer’s job safer. Alejandro, as several other loan officers has been attacked and robbed once after a meeting.

We were then able to head to another community, where a group was having the last step of the training that will enable them to take a loan. This last session is a review of all the aspects of the loan, future Esperanza members are reminded that the loans repayment consist of capital, interest, insurance and savings. They are also taught basic advices for their businesses, and their commitments as a group. This was my first time attending a training session, and it made me realize how a lack of basic education can be a bridle for people to gain control on their life.

I don’t mean to insult anyone’s intelligence. When I am interviewing them, I have sometimes felt amazed by some borrower’s open-mindedness although life opportunities seem limited in their environment. However, I must say that the training session mainly looked like an elementary school class. Alejandro, who learnt basic Creole as he has been in close contact with group of Haitians borrowers, had to repeat the same things tirelessly, both in Creole and Spanish, so that the future borrowers would remind it. He also provided very basic but indispensable advices about the necessity to sell their products at a higher price than it was purchased, and to consider other expenses such as transportation.

The group was eventually reviewed by the branch office manager, and their last step to the issuing of the loan could take place: the group committee where members discuss the loan amounts that each of them is going to receive. As they are bound to pay back together, these committees serve to put limits on the loan amounts for members who may not be able to handle too big repayment installments and put the whole group at risk. I was curious to witness one of these committees, and as I could expect group members where not really eager to put limits on other members loan amounts. Once again, the loan officer had to put a lot of energy (I know I am repeating myself, but the video speaks for itself) to explain the aim of the process and make it constructive.   Experience shows that these committees actually become constructive when groups have already taken several loans and gone through difficulties.

After a last visit to another group of borrowers, I was on my way back to enjoy a nice weekend in Santo Domingo.

********************************************************************************************************

Esperanza has a lending team! Help us reach the threshold of three members, by end of 2009 !!!

For English version, click on “(more…)”, then scroll down.

Après un mois passé dans la  succursale de Samanà de mon institution de microfinance Esperanza, me voici, de retour à la capitale Santo Domingo, après une journée entière de voyage. Samanà ne se trouve qu’à un peu moins de 250km de la capitale, mais le manque d’infrastructures routières et le fait qu’une seule compagnie œuvre dans le transport de voyageurs, rendent un voyage des plus banals dans le monde occidental en une épopée d’une journée en République Dominicaine.

Pas facile de se remettre dans le bain du travail de gestion et d’administration, réalisé ici au siège d’Esperanza après avoir en quelque sorte tiré le rideau et été au cœur de l’action, littéralement les manches retroussées et mains dans la boue (la saison des pluies commence à s’annoncer dans les Caraïbes).

Pourtant les tâches qui m’attendent ici au siège de l’institution ne manquent pas de challenge et d’intérêt, avec notamment la mise en place d’un outil de mesure de l’impact social qui me permet au passage de rencontrer et discuter avec les cadres d’Esperanza et de les managers des différents programmes de microcrédits et services complémentaires de santé et d’éducation.

Il y a deux mois encore, la microfinance se représentait dans mon esprit, comme un concept, un outil qui permet d’accélérer le développement économique d’une région tout en y apportant des progrès sociaux  comme le renforcement du pouvoir économique et de l’autonomie des classes les plus pauvres. Après un entraînement complet dans les bureaux de Kiva, le concept se matérialisait en problématiques économiques (taux d’intérêts élevés, modalités de prêts, viabilité économique des institutions de microfinance, modèle de personne à personne et transparence). Enfin, après une première semaine au siège d’Esperanza, la microfinance devenait des noms de programmes menés dans le pays, associés à des chiffres (portefeuille d’actifs, nombre d’associés) et des points sur une carte (les succursales !).

Cependant, tous ces concepts et ces idées se sont évanouis pendant un mois, remplacés par des questions beaucoup plus pratiques : Dans quelle « Guagua » (voir vidéo) dois-je monter si je veux voir la réunion du groupe «Unidas para Seguir » après celle de « Trabajando para el futuro » , ou encore « Comment puis-je faire pour inciter Maribel a me parler plus en détail de son commerce et de ses plans » et enfin « Comment cela se fait-il que tant de commerces tenus par les clientes d’Esperanza sont à ce point identiques ». Ce brusque changement de réalité m’a fait perdre de vue les objectifs d’analyse sur le terrain des principes et concepts précédemment exposés. Peut-être que l’aspect le plus intéressant  et ambitieux du travail de Kiva Fellow est d’être capable de zoomer et dézoomer avec agilité entre le travail de terrain et de bureau,  faire un pont entre le pratique et le théorique.

J’ai encore beaucoup à voir et apprendre sur le terrain, notamment les aspects de ce qui est appelé ici la microfinance Plus, c’est à dire les services complémentaires de santé et d’éducation. J’espère aussi pouvoir pousser un peu plus l’analyse sur les différents aspects de la méthode Grameen de microcrédit, qui est celle implémentée par Esperanza.

Cependant, une chose m’a réellement marqué : En un mois, à chaque fois que j’ai expliqué que je travaillais au sein d’une institution qui donne des prêts de petits montants sans besoin de garanties, mes interlocuteurs se mettaient soudainement à me porter un intérêt des plus vifs, et au bout de quelques minutes essayaient de voir s’ils ne pouvaient pas obtenir un prêt par mon intermédiaire.

Bien que je ne les ai jamais vus, beaucoup de clients d’Esperanza m’ont décrit leur seule autre option pour obtenir du crédit : Des véhicules ambulants, faisant office de banques, et offrant des prêts à court terme aux commerces sur la route, avec des intérêts allant de 10% à 20% par mois ! Seules les personnes ayant un emploi stable dans le tourisme, peuvent, avec l’appui d’une lettre de leur employeur, obtenir un prêt dans une institution bancaire normale. Ceci démontre, que si la microfinance est bien implantée dans certains pays, elle a encore un énorme marché et marge de développement en République Dominicaine et  certainement dans beaucoup d’autres pays.

Après un mois à Samanà, j’ai eu l’occasion de rencontrer beaucoup de clients, de temps en temps de profiter de leurs services pour découvrir des pâtisseries que je n’avais jamais goutées,  ou encore faire des achats aussi banals que du pain. Je me suis même vu parfois offrir des produits, et notamment 500g d’un excellent morceau de calamar. Lors d’une visite touristique un weekend, j’ai eu l’occasion de passer un moment, cette fois-ci en tant que client, avec  un entrepreneur d’Esperanza, que j’avais précédemment rencontré, et qui tient une « boucherie-bar ». Tous ces relations commerciales des plus normales, mettent en évidence s’il en était encore besoin, que les connexions entre les entrepreneurs de pays en voie de développement et les membres de Kiva (qu’ils soient Kiva Fellows, ou plus simplement  prêteurs) se font d’égal à égal, basé sur la confiance et le respect mutuel nécessaires à une saine relation commerciale.

Si vous découvrez Kiva avec  cet article, lancez-vous et inscrivez-vous afin de prêter vos premiers 25$ et voir le résultat.

English version

After spending one month in my MFI’s branch office in Samanà, I am back in Santo Domingo, the capital city, after a day-long trip. Samanà is less than 250Km (150 miles) from Santo Domingo, but the lack of well-maintained roads and the fact that only one company offers transportation between the two areas transforms what would have been an ordinary trip in the western world into an epic journey in the Dominican Republic.

It is not easy to get back into the swing of doing the administrative work carried out in Esperanza’s main office when one has been witnessing what happens in the field  rolling-up the shirt sleeves and literally plunging one’s hands in the mud (the rainy season is just starting in the Caribbean). However, the tasks to be accomplished in Esperanza’s headquarters do not lack challenge or merit, comprising of, in particular, the setup of a social impact assessment tool.  This gives me the opportunity to meet Esperanza’s most experienced employees and the managers of different microcredit programs and accompanying health and education services.

Two months ago, my concept of microfinance was of a tool that enables and supports economic development of an area or country, while contributing to social improvements such as the empowerment of, and increase in autonomy of the lowest social classes. After completing a comprehensive training at Kiva’s offices, this concept became more defined in terms of economic issues such as high interest rates, loan terms, the sustainability of MFIs, and so on. Eventually, after spending one week at Esperanza’s main offices, microfinance materialized into concrete facts such as microcredit program names and relevant statistics (portfolio outstanding, number of clients) and thumbtacks on a map (the branch offices!)

However, all of these concepts and  thoughts vanished as soon as I arrived in Samanà, and were replaced by much more practical questions : “In which ‘Guagua’ (see the video)  do I have to jump in if I want to attend both the‘Unidas para seguir’ and ‘Trabajando para el futuro’ group meetings” or “How can I encourage Maribel to tell me more about her business and her plans for the future” and at last “Why do so many clients’ businesses look exactly the same?”. This radical change of scenery caused me to forget  the need to analyze the principles and concepts of microfinance described above while in the field.  Maybe one of the most challenging parts of a Kiva Fellow’s work  is to be able to zoom in and out with flexibility and ease between office work and work in the field, or being able to bridge between the theoretical and practical aspects of microfinance.

I still have a lot to see and learn about in the field, particularly around the aspects of Microfinance Plus,  or the complementary health and education services. I also hope I will gain a better insight on the outcomes of the Grameen method, implemented by Esperanza.

Nonetheless, one thing has really struck me: every single time that I have explained  that I am working with an institution that gives small loans without requiring any collateral, the person I am talking to starts paying much closer attention to me and eventually asks if they can get a loan through me.

Although I have never seen them, many of Esperanzas’ clients described to me their only other mean of getting credit: vehicles passing by and acting as informal banks, lending money to roadside businesses with interest rates ranging between 10% and  20% a month! Only people with a steady job in tourism may apply for a loan in a traditional bank, after requesting a letter of support from their employer. This demonstrates that although microfinance may be strongly established in certain countries, it still has a wide and untapped market t in the Dominican Republic and certainly in many other countries.

After one month in Samanà, I had the opportunity to meet a lot of generous clients, and to enjoy their businesses from time to time, tasting new pastries or purchasing everyday items such as bread. I once was even offered a 1lb piece of excellent calamari. On a tourist trip one weekend, I stopped by at an Esperanza entrepreneur’s “butcher-bar”, but this time as a client. All these normal business relationships highlight the fact that connections between Kiva’s entrepreneurs in the developing world and Kiva members (either Fellows or lenders) are based on trust and mutual respect between equals, which is necessary for any kind of business relationship.

If you are discovering Kiva with this article, get involved and lend your first 25$ to see the result.

Lots of thanks to Gemma for helping with the translation!

For English version, click on “(more…)”, then scroll down.

Après quelques jours dans la province de Samanà, une péninsule qui se situe au Nord-est du pays,  je n’ai pu m’empêcher de m’interroger sur l’utilité réelle et les bénéfices concrets du travail réalisé par mon institution hôte et surtout par la microfinance en général.

En effet, après avoir passé ces premières journées à faire de longs trajets, dans des conditions difficiles sur les quelques routes bosselées et mal entretenues de la péninsule pour assister aux réunions bimensuelles de remboursement des prêts, j’ai constaté que la majorité des commerces tenus par les clients d’Esperanza, sont en tout points identiques : il s’agit de femmes qui vendent de manière ambulante des vêtements, chaussures et bijoux fantaisie (en toc), et dont la situation n’évolue pas vraiment, même après plusieurs cycles de prêts.

Different ways to get from one borrowers meeting to another

Laissez-moi faire un point sur l’état économique de la région.

Tout d’abord, la région, comme tout le pays vit depuis très longtemps dans une situation de paix et de relative stabilité politique. Il n’y a pas de camp de réfugiés ou de déplacés, ni de communautés opprimées. Les Haïtiens qui représentent la seule communauté d’immigrants, bien que quelque peu discriminée et parfois mal accueillie, ont quand même pu s’intégrer dans des conditions acceptables, à comparer avec d’autres pays en voie de développement. Personne ne meurt de faim, même si plusieurs clientes d’Esperanza lors d’interview m’ont dit êtres soulagées de s’être éloignées de la préoccupation quotidienne de nourrir leur famille.

Cependant, de grosses carences d’infrastructures et services entravent le développement économique de la région :

Premièrement, on ne peut absolument pas se fier au réseau d’électricité, a part sur le fait qu’une panne surviendra quotidiennement. Pour moi, en tant que Kiva fellow, les conséquences sont bénignes  (me coucher à 20h00 un samedi soir et retarder de presque une semaine maintenant l’opportunité de laver mon linge). Mais aujourd’hui nous avons rendu visite à une cliente qui tient un petit salon de beauté, et qui se retrouve en grande difficulté car elle n’a pas pu travailler ces deux dernières semaines a cause de coupures incessantes.

Deuxièmement, l’état des routes freine terriblement les possibilités de déplacement efficace : on se retrouve obligés à slalomer entre les crevasses ou les bosses (ce qui les rend dangereuses) et en dehors d’une route principale goudronnée, les rues des villes sont en terre, se transformant souvent en torrent de boue et n’ont pas de noms. Il n’y a pas non plus de système de ramassage d’ordures.

Enfin l’eau courante est également peu fiable et tout le monde n’y a pas accès. L’eau chaude n’existe pas (a part certainement dans les complexes touristiques)

Après avoir pu observer l’étendue du travail de développement que cette région rurale a à accomplir, je n’ai pu que constater que les micros-commerces de bijoux et accessoires n’y changeront strictement rien, ce qui a provoqué en moi une pointe de découragement. Bien sûr, l’intérêt du microcrédit est indéniable pour ce type de commerce qui se base sur la vente au détail de produits qui n’ont pas encore atteint ces zones rurales. La plupart de ces femmes se rendent à la capitale une fois par mois pour s’approvisionner, et grâce à un apport de capital substantiel avec les prêts obtenus, rendent ce trajet plus rentable en ramenant une plus grande quantité de produits. De plus le simple fait que la grande majorité de ces entrepreneuses, dont aucune n’avait jamais eu accès à une quelconque forme de crédit avant, redemande systématiquement un prêt, et que nombre d’entre elles étaient sans activité avant d’avoir reçu leur premier prêt montre les aspects positifs du microcrédit dans la région.

Cependant, ma hâte se faisait grande d’interviewer des clients dont les commerces s’inscrivent plus directement dans le développement économique de la région, car je ne cessais de me poser la question suivante : Pourquoi vendre et acheter des bijoux en toc alors que tellement de choses plus basiques manquent ? Et ces femmes ne se font-elles pas concurrence entre elles ?

J’ai obtenu une partie de la réponse à cette première question, après avoir interrogé le gestionnaire de la succursale d’Esperanza a Samana. Celui-ci m’a expliqué que si ces petits commerces fonctionnent c’est parce que l’activité principale de la région qu’est le tourisme a permis d’apporter du capital et de faire circuler de l’argent dans la zone, même si les clients d’Esperanza ne sont pas directement bénéficiaires de cette activité(Presque tous les hôtels, restaurants ou commerces fréquentés par les touristes, sont tenus par des étrangers Européens ou Américains, qui disposent de meilleurs moyens et savent comment offrir au touristes des établissements attractifs et de standards et apparences plus occidentales)

L’autre partie de la réponse m’est venue avec l’expérience de nombreux entretiens avec les clients d’Esperanza. Ici : le commerce se fait à petite échelle, et souvent par le biais de connaissances directes,  la concurrence n’est pas un réel problème et même si l’achat d’accessoires n’améliore pas substantiellement les conditions de vie d’une personne, elles lui offrent un petit plaisir (d’ailleurs partagé par la vendeuse) auquel chacun a le droit et contribuent  à améliorer son moral ou la perception de sa condition.

La responsabilité devant un prêt, l’apprentissage du commerce et la solidarité dans la communauté sont autant de facteurs bénéfiques stimulés par le microcrédit et maintes fois démontrées par les entrepreneurs dans des cas de réunion de remboursement ou les choses n’ont pas tourné comme prévu pour tout le monde. Un des meilleurs exemples fût pour moi Sotero, un entrepreneur de 68 ans, en train de monter une boucherie grâce à son prêt après s’être maintes fois relocalisé pour des raisons économiques et me disant avec un grand sourire et un brin d’attitude théâtrale: « Toute ma vie, le travail m’a permis d’évoluer et me le permet encore. J’aime le travail, la joie et l’argent aussi »

Et si l’agriculture par exemple ne s’est pas développé à un niveau industriel sur ces terres pourtant si riches,  presque tout le monde entretient son petit potager et élève chez soi des poules, ou un cochon, ou voire même des vaches, pour le guide touristique qui m’a fait découvrir une partie de la région, et ainsi peut faire face à des périodes de ralenti économique comme le tourisme implique souvent.

Ma conclusion a la question initialement soulevée est que non : seul, le microcrédit ne va pas soutenir tous les aspects du développement de la région. Cependant, grâce à l’augmentation du niveau de vie des habitants des classes les plus basses et des communautés les plus isolées (et donc les plus touchées par les problèmes d’eau ou d’électricité) ces obstacles ne tarderont pas à s’imposer comme une nouvelle priorité.

Pour le reste, j’ai pu comprendre que tout simplement les priorités de développement de cette région ne sont pas forcement celles que l’on peut attendre du point de vue « occidental » et le commerce de petite échelle est un modèle peut-être mieux adapté aux zones rurales (Alors que les supermarchés sont très mal approvisionnés dans la région et que les prix sont élevés, J’ai pu gouter et acheter chez une cliente d’Esperanza  des pains et pâtisseries délicieux à des prix imbattables)

Lors de la deuxième semaine, j’ai eu l’occasion de voir les types de commerces visités se diversifier, mais en ce dernier jour, après un lever très matinal et avoir jonglé entre les motoconchos (motos-taxis), et les coffres des picks-up pour pouvoir visiter et interviewer six entrepreneurs qui vendaient toutes des vêtements ou bijoux fantaisie, j’ai pu prendre le temps de découvrir que si les si commerces étaient identiques, j’avais en face de moi six individus racontant six histoires uniques.

Prenez le temps de visiter le site de Kiva et de choisir un entrepreneur

English version

Fake jewelry serving economic development?

After a few days in the DR’s province of Samana, a peninsula in the northeast region of the country, I could not stop myself from calling into question the  value and the benefits of the work carried out by my host MFI and more generally, by microfinance

After spending these first few days on long trips, in harsh conditions on the few rugged, bumpy and unmaintained roads of the peninsula, to attend the bimonthly repayment meetings, I realized that a majority of Esperanza’s clients’ businesses are all the same:  women selling clothes, shoes and fake jewelry in the streets and whose economic situation does not substantially change, even after going through several loan cycles.

Let me explain the economic situation of the area.

First of all, the region, much like the rest of the country, has for a long time been peaceful and has enjoyed relative political stability.

There are no refugee camps, nor is there an oppressed community. Haitians are the only immigrant community, which still suffers from some discrimination from time to time.  They have been able to integrate themselves fairly well compare to what happens in other developing countries. No one in the DR is starving, even if several of Esperanza’s clients confessed feeling relieved at having left behind the daily worry of how to feed their families.

Nevertheless, large gaps in basic infrastructure and services are considerably slowing down economic development in the region:

First of all, power is absolutely unreliable, except for its consistent daily outages.  As a Kiva Fellow, the consequences for me are not dramatic (having to go to bed at 8pm once on a Saturday night and delaying doing almost a week’s worth of laundry). But we visited a client today who runs a little beauty salon who found herself in a difficult situation because she has not been able to work a single day in the last two weeks because of the power outages.

Next, the state of the roads completely slows down the possibility of efficient transportation. One is obliged to slalom between bumps and cracks which make driving unsafe.  Except for the main street of each town which are all paved, all the others are dirt roads which often become streams of mud and don’t have names.  Also there is no garbage collection system.

Finally, running water is also unreliable and many communities do not have access to it. Hot water is a luxury reserved for tourist resorts.

As I was beginning to realize all the widespread improvements this rural area still needs to achieve, I had to admit that fake jewelry micro-businesses would not change a thing. I started feeling a bit discouraged.  The benefits of microcredit are undeniable for these kinds of retail businesses selling products that have not yet reached rural areas. Most of these women head to the capital city once a month to purchase merchandise for their businesses.   Thanks to the loans they obtain, they increase their capital revenue, and can make this journey more profitable by being able to buy a larger amount of goods. Moreover, the mere fact that almost all of these entrepreneurs, who had never before had access to credit of any kind, systematically request a new loan, (and that many of them had no revenue-generating activity before getting their first loan), demonstrates the benefits of microcredit in the region.

Nevertheless, I was really looking forward to interviewing clients whose businesses would be more directly involved in economic development, because I could not stop thinking : What is the point of selling and buying fake jewelry when so many basic necessities are missing? And aren’t all these entrepreneurs competing against each other?

I received an answer to this first question from Samana’s branch office manager. He explained to me that these little businesses are actually profitable because the area’s main economic-generating activity is tourism, which has brought a little bit of money to the area, even though Esperanza’s clients are not directly involved in the industry.   (Almost all hotels, restaurants and shops frequented by tourists are owned by foreigners, mostly Americans or Europeans, who have greater means and know how to offer more attractive and western-looking establishments)

The rest of the answer came to me through the numerous interviews I had with Esperanza’s clients. All of their businesses are small scale, and are often successful because of the relationships the women have with the locals. Competition is not really an issue and if buying accessories does not improve someone’s living conditions, it still provides some deserved happiness and cheer  (which is also shared by the vendor ),  and improves their outlook on their situation.

The responsibility of taking a loan, learning about operating a business and the solidarity within the community are other social benefits fostered by microcredit.  These are manifested many times by Esperanza’s entrepreneurs in repayment meetings when things have not gone well for every borrower. For me one of the best examples was Sotero, a 68 year old butcher, who had to move his business several times for economic reasons but was now setting up a new little butcher shop thanks to his loan. Smiling, he told me with a bit of histrionic gesture that:  “All my life, working has allowed me to grow and evolve and still does. I like working, being happy, and money too!”

Also, although agriculture has not reached an industrial level despite the region’s rich soil, almost everyone has a little vegetable garden, and raises chickens, pigs or even a few cows, like the guide who took me through the area. This way people are able to better protect themselves against a period of economic slow down, which greatly affects tourism.

My response to my initial doubts is that No: microcredit alone cannot address all of the economic development needs of an area. However,  thanks to the improvement in the standard of living for the poorest classes and those that live in the most isolated areas ( and who therefore suffer most from the lack of water and electricity), these issues will soon become the new priority.

As for the rest, I have realized that the development priorities for this region are not the same as what a westerner would consider important.   Promoting small-scale businesses might be a better model for rural areas (While grocery stores are poorly supplied and quite expensive, I was able to buy and enjoy awesome homemade pastries and breads from an Esperanza client at an unbeatable price ).

During the second week, the types of businesses I had the opportunity to visit became more diverse.  However, on my last day, after waking up early and going from one place to another on motoconchos (taxi-motorbikes) or on the trunk of pickup trucks I visited six entrepreneurs who all sold  clothes and jewelry.  I took the time to find out that although their businesses were the same, I had interviewed six individuals with six unique stories.

Lots of thanks to Gemma for helping with the translation!

For English version, click on “read the rest of this entry”, then scroll down.

« La République Dominicaine est un pays aux couleurs vives, musiques et danses irrésistiblement entraînantes et climat tropical».Voici la seule image que j’étais capable de me figurer, en attendant mon avion à l’aéroport de San Francisco, du lieu où j’allais passer les prochains mois de ma vie.

Une semaine après mon arrivée dans le pays, cette vague représentation s’est précisée et matérialisée, en fonction des premières impressions que j’ai pu ressentir, et dont voici quelques exemples.

Tout d’abord le contact avec les habitants :

Lorsqu’un lien direct existe avec une personne, le contact sera tout de suite chaleureux et personnel. J’ai été impressionné de voir comment mes collègues ont rapidement enregistré mon nom, dont la sonorité ne leur est pourtant pas familière. Si le lien est plus commercial (hôtel, petit commerce), le premier contact peut vous laisser une impression de froid, mais en général, il suffira de faire l’effort d’échanger quelques mots avant d’échanger la monnaie pour créer une relation plus amicale, et passer du tarif « gringo » au tarif normal. Beaucoup de personnes viennent naturellement vers vous, et si certaines vous voient comme un touriste à qui soutirer de l’argent, d’autres sont tout simplement curieuses et prêtes à rendre un service

Les routes et les voitures

Si je me suis senti jusque maintenant en sécurité dans n’importe quelle situation, le danger vient sans aucun doute de la route. C’est la loi du klaxon le plus fort (seul équipement dont on est sûr que tous les véhicules sont munis) et les piétons n’ont qu’à bien se tenir.

Les quartiers plus anciens et zone piétonnes ne manquent pas de charme mais en ville, les trottoirs servent souvent de décharge à ciel ouvert. Sur les routes, on est toujours frappé de voir fonctionner ces voitures d’un autre âge, à la carrosserie défoncée et rouillée, aux roues déformées, aux portières manquantes et pourtant presque tout le temps bondées. Il s’agit en fait de véhicules publics tout à fait officiels qui servent de transport collectif plûtot efficace d’ailleurs. Même ce qui apparaît sur GoogleMap comme des axes principaux de la ville sont souvent des rues étroites où la circulation est chaotique.

Dans ce décor caribéen où couleurs, musiques, nourritures font écho à la chaleur du climat tropical, des personnes de toutes sortes de classes sociales se mélangent. Si certains ont des standards de vie élevés (et sont équipés de gadgets technologiques bien plus modernes que les miens), beaucoup, bien plus modestes font preuve de beaucoup d’ingéniosité et de persévérance pour se générer un revenu : mini-boutiques coincées entre deux murs d’immeubles, vendeurs ambulants, services de toutes sortes, les exemples foisonnent dans les rues de Santo Domingo. C’est dans ce contexte, et avec l’objectif de servir les populations marginalisées pour qu’elles puissent par leurs propres efforts et grâce à un accès équitable au capital, que les organismes de microfinance interviennent en République Dominicaine et partout dans le monde.

Durant les mois qui viennent, je vais avoir la chance de partager avec la cinquantaine d’autres Kiva Fellows répartis au quatre coins du monde des anecdotes sur les chocs culturels et surtout les histoires passionnantes des entrepreneurs présentés sur le site Internet de Kiva

Dans un prochain post, je vous parlerai plus précisément d’Esperanza Internacional, le partenaire de Kiva avec qui je commence à travailler. En atendant, cliquez ici pour consulter les profils de leurs clients.

English version

« The Dominican Republic is a country with bright colors, irresistible music, dancing and tropical climate.” While I was waiting for my flight at San Francisco’s airport, this is the picture I had in my mind of the place I was going to spend the next few months of my life.

One week after my arrival, this vague impression has become more accurate and concrete based on my first experiences. Here are some examples.

First of all, getting in touch with the locals:

When a direct connection exists with a person, interactions will instantly be warm and personal. I was impressed at how quickly my colleagues at work remembered my name, even though it is unfamiliar to them.

If people have a connection through business (like hotel, little shops,…) the first contact often seems colder, but generally, you just need to share a few words before exchanging money and you will  fare. Seeing you as a foreigner, many people approach you, and although some just hope to swindle you, many are just curious and ready to lend a hand.

Roads and cars

So far, I have felt safe in pretty much any situation, but the roads are definitely dangerous. Drivers blast their horns (the only reliable piece of equipment on every car), and pedestrians had better watch out!

Historic districts and pedestrian areas are charming but in town, sidewalks are often used as an open dump. On the roads, it is always amazing to see vehicles from an age passed actually working, with rusty and dented bodies, distorted wheels and missing doors; nevertheless these cars are always packed.  These vehicles are in fact, part of the official public transit system and are pretty efficient, by the way. Even the roads that seem like main thoroughfares are often narrow streets congested with chaotic traffic.

In this Caribbean setting, colors, music, and food echo the tropical heat; all kinds of people from different social classes mingle together. Some of them enjoy a high standard of living (and own electronic devices much fancier than mine), many of them come from  much more modest backgrounds  and show a lot of ingenuity, drive and perseverance to earn a little income from: mini-shops stuck between the walls of two buildings, food stands and  businesses services of all kinds; examples abound in Santo Domingo’s streets.

In this context, microfinance institutions are working in the Dominican Republic and elsewhere around the world with the aim to serve poor and marginalized people so that they can make a living by their own efforts and by having fair access to capital.

For the next few months, I am proud to share, along with 50 other new Kiva Fellows scattered allover the world, anecdotes and impressions on cultural shocks and overall captivating stories of micro-entrepreneurs who appear on Kiva’s website.

In another entry, I will write about Esperanza Internacional, Kiva’s partner with which I’m working. Until then, click here to browse their borrowers’ profiles.

Lots of thanks to Gemma for helping with the translation!

by Ashley Nelsen KF 6 & 7

The power of micro finance is the social programs that leave lasting improvements within entrepreneurs lives. While working in the Dominican Republic with the MFI Esperanza I witnessed first hand the impact of such social programs. Esperanza whose social programs include business training for their entrepreneurs, a savings program, affordable health care and insurance, vocational trainings, and loans for housing improvements ensure that their clients not only improve their economic livelihood, but are better educated, healthier global citizens.

Walking to "Batey 16". Completely surrounded by sugar cane (at this time all cut).

The Dominican Republic recently enacted a law that required all documents (banking, land deeds, legal, etc.) to be signed with a written signature. Before this law was passed those who were illiterate could sign documents with a fingerprint of their right thumb. As you can imagine many used this handicap to take advantage of the illiterate. One Dominican farmer I met had even unknowingly signed over the title of his land because he was unable to read the document he was signing.

One room schoolhouse where classes are conducted.

A change in the law has encouraged many to participate in Esperanza’s literacy program. On the day I visited a rural batey, called “Batey 16” there were 15 people awaiting their professor to arrive. This one room schoolhouse was not composed of your typical students, these students were predominantly over the age 30. After the professor arrived they were eager to show their homework which consisted of circling in a newspaper page all the vowels they could identify. Their professor explained that they had started from the beginning- learning the alphabet. They were now working on identifying vowels and the sounds they make, and soon would begin learning to write their name.

68 year old gentleman circling vowels.

My father has always told me that, “the best investment you can make is in your education, because no one can ever take that away from you.” That quote ran through my head as I watched students eager to circle a previously overlooked vowel. I am forever grateful to have been witness to such an empowering program.

To fund a Kiva/Esperanza loan please visit the link below:

http://www.kiva.org/app.php?page=businesses&partner_id=44&status=All&sortBy=New+to+Old

For more information on Esperanza and their work please visit the link below:

http://esperanza.org/us/index.php?option=com_frontpage&Itemid=1

On that note: what many lenders don’t know is that…

Until there is a recognized MFI in Haiti, Kiva lenders need look no further than the Dominican Republic to support Haitians! The majority of Esperanza’s clients are in fact Haitian or of Haitian decent. The civil unrest in Haiti has resulted in millions of Haitians migrating to the Dominican Republic for an opportunity at a better life. So,  if you have some Kiva credit that you have been holding out for a “Haiti” loan look no further than a Dominican Republic Esperanza loan!

Typical micro finance bank meeting.

Esperanza loan officer David Mercedes

We had a visitor during a bank meeting. This lizard caught a cockroach during our bank meeting.

Home in the country side of the Dominican Republic

I was really excited to learn that Esperanza/Hope International are getting ready to launch Kiva loans from Haiti! I am really, really excited that I will be part of this amazing opportunity. As many of you know Haiti, the least developed country in the Western Hemisphere, has been experiencing severe economic recession. This has resulted in the majority of its residents to live in extreme poverty. To give you an idea of the situation the current gross national income (GNI) is currently only $560 (USD). Haiti is also severely deforested, with estimates of approximately only 2% of the country forested. The economic and environmental conditions make Haiti a destination of UN Peacekeepers,  and development organizations.

We will be traveling to Trou du Nord, Haiti to interview Kiva borrowers. I am unsure of how many loans will be posted. But I am confident that Kiva members will snap them up quickly so keep your eye out for the Haiti loans! I hope you will participate in the important challenge of alleviating poverty one micro loan at a time!

Esperanza/Hope International Central Office in Santo Domingo

This afternoon I had the pleasure to see a group of 5 women receive their loan money.  I have to say when I saw the women get their money and talked to them about what they planned to do with their loan I got a bit emotional. One woman planned to sell men’s shoes, another a fruit stand, and another clothing. It is such an amazing thing to see these women get a chance at something more. One of the women told the loan officer that in two years she was going to have a bought a car by then and was going to stop by and pick him up! Now that’s confidence.

Analin, Kalie and I

Loan officer dispersing the loan money.

My Dominican co-workers wore sweaters to work when temperature fell below 70 degrees in December. “Winter is cold here,” friends and employees told me. While I stuck to my t-shirts in the day, I did cut short my nightly unheated showers.

Mujeres Necesitades outside the Hato Mayor office: these bank members finished a loan in December and took out another, expecting that December would be a better month for sales. Numerous community banks reported throughout October and November that they had seen an economic downturn in their areas. Many credit the worldwide economic crisis. Most expected improvements as the new year approached.

At Esperanza International, offices in El Seibo and Hato Mayor recently worked through a large number of loan cycle renewals. Many community banks successfully wrapped up their six-month payment plans in early December, and promptly transitioned to another round, taking advantage of the annual rise in consumer demand around Chritsmastime and New Years. Not only was it gift-giving season, December also marks the start of the zafra, the sugarcane cutting season. Notoriously brutal, sugarcane has a legacy and a reality that falls somewhere on the “excessively exploitative” industry spectrum. One colleague calls the trade  “a 19th century system that has just stuck around.” Undocumented Haitian migrant workers both survive by and suffer under the sugarcane economy. Sugarcane plantation communities, bateys, are strikingly isolated, resource-poor, and under-served. Bateys are also home to many of Esperanza’s community banks.
During a December interview, Cloreta, a Kiva-funded entrepreneur explained her situation simply, “this loan lets me keep food on the table.” While most of my Kiva interviews touch on hopes to pay school fees, open full-service stores, or repair individual homes, this conversation centered on a battle for subsistence.  Many of the challenges facing Cloreta relate to living on a batey.

The Caribe Tours bus stop in Santo Domingo. Getting around the Dominican isn't too hard. These 60-some person buses go to all major cities. Smaller 25 person vans, taxis, motos, and other vehicles make up a wide array of transport options. Any combination of these methods gets you almost anywhere.

Away from the plantations, it is easy to gather an optimistic impression of economic development in the Dominican. Bus companies, motos*, guaguas*, carros publicos* and decent road infrastructure allow access to many nooks and crannies of cities and countryside.  Motorcycle and scooter businesses fill streets with thundering packs of personal transport. There are innumerable dance clubs. Free trade zones in several cities employ thousands of workers, and the government seems to enforce some basic employment rights. Semi-rural towns have restaurants and motels. A significant number of young adults attend a battery of urban universities; degrees in medicine, computer engineering, accounting, and tourism studies are popular. Cable television, DSL internet, and Playstations regularly

Cheap, easy, and crowded city transport: the carro publico. Cram in six perhaps seven passengers. About 50 cents a ride.

Example of starting small: a bag's worth of clothes to sell. This entrepreneur hopes to expand over time.

appear in middle-income homes. Entrepreneurs are able to access large inventory vendors to buy in bulk. Entrepreneurs in rural and semi-rural areas can access main roads, and streams (although sometimes small) of clients who both live and pass through their communities. A good number of Esperanza bank members from all of these areas show convincing progress over time: a small food stand advances into a variety-goods colmado, a clothing seller goes from selling out of a backpack to setting up her own home-side storefront. These same entrepreneurs also talk of changing their tactics and strategies and adjusting their inventories and in order to fit into the best local economic niche.  There is both flexibility and possibility.

Entering a batey is a distinct experience. Generally, long tire-pounding dirt roads wind their way from main thoroughfares into seas of cane– tall, stiff, and green. Austere cookie-cutter housing (built by the government or

private companies), sits secluded on cleared-out land somewhere amidst the green. Plumbing is rare. Some bateys have schoolhouses, others have no sanitary water. Some cane companies have abandoned the bateys themselves, but the crop still grows and locals harvest and sell it on their own. Bateys still under commercial control may have company stores, chunks of wages paid in “store credit” rather than cash, and rules forbidding locals to vend similar goods in the batey. Much like undocumented immigrants in the United States, Haitians cross the Dominican border in great need of work, and form the backbone of the most physically demanding and poorly paid workforce in the country. Human rights groups narrate a story of slave-like conscription and labor conditions, (local Dominicans may agree or disagree with that characterization). Migrant workers’ vulnerability, however, goes undisputed. The communities generally speak any mix of Kreyol and Spanish. If families have come “illegally” from Haiti**, they lack legal status, along with their children.

Sea of cane (Credit: Kayla Villnow)

Children of Haitians born in the Dominican stand in a citizenship void: unrecognized by either government. Dominican officials periodically round up illegal Haitains for mass deportations– another reason to remain isolated in the cane. Dominican radio talk show hosts may engage the topic of the “Haitian problem” from time to time.  Rosy is not the word for the Haitian-Dominican relationship. The roster of issues is long.

UN peacekeeping in Haiti (credit: www.pbase.com) See postscript.

Cloreta lives on a company-owned batey.  She is a Haitian immigrant, as are the majority of her neighbors.   She sells modest foodstuffs—crackers, sugar, and coffee, oil and flour. She explained that she’d like to sell more diverse products, but this would conflict with the rules of the company-owned store. At the time (early December) she pointed out that the first wages of the

Some bateys have basic community infrastructure, such as school houses.

season would arrive in about a week. When cane cutters get paid, the batey economy gains liquidity, and Cloreta can take in cash.  As she said, right now her income really only allows her to subsist and pay back her loan.  The Esperanza payments, however, include mandatory savings, so at the end of her loan she will end up with an additional cushion.

The cane season will continue until the summer.  Perhaps the six-month period will allow Cloreta to add to her savings, and allow her to reach beyond the “food on the table” goal.   Cloreta plans on continuing with her microloans, she sees this opportunity as completely worthwhile.   Other community members clearly have taken notice: the bank was training at least ten new members that day.  During our interview, one of Cloreta’s colleagues was busy at work translating the loan officer’s information into Kreyol, since several knew no Spanish.

Fruits of much labor: a Kiva-funded bank gathered in a colleague's convenience store. A good example of successful growth over time.

I can’t decide if it’s fair to say that the cane season makes December and entirely “sweeter” month than others.  Regardless, the batey clients certainly are skilled “lemonade” chefs, given all of the “lemons” they get.

Hasta la proxima,

Kalie, Kiva Fellow-Dominican Republic

(written from Los Alcarrizos)

*guaga: a van or truck, usually smaller than a 60 person bus.   May also refer to buses. Motos: motorcycle taxi.  Usually $1 or $2 a ride.  Carros publicos: run down recycled cars that run designated routes in cities.  About 50 cens a ride.

** Postcript on Haiti: Haiti today is considered a “failed state.” In the fall of 2008, hurricanes killed hundreds of Haitians, and completely destroyed entire communities. The latest of a series of UN peacekeeping forces has been stationed in the country since 2004 (UN-Haiti missions date back to 1993), in response to continued political violence between the Haitian government and other forces vyying for power. Many Haitians who attempt to leave the country cross over to the Dominican Republic (a rather pourous border). As undocumented workers, much like in the United States, they become the cheap-labor source for cane-cutting.
The racial and cultural divides between Dominicans and Haitians is palpable. A textbook might narrate the complexities of Haitian history from its birth via the famous country-wide slave uprising (Haiti is the world’s oldest black republic) to years of occupation, dictatorship, violent political instability, and today’s profound poverty. Meanwhile, day to day life in the Dominican reveals deeply seated ideas of race—the common phrase“black as a Haitian” is one way to call someone unattractive. As a Catholic-dominated country, many Dominicans also come up with wild stories of Haitian Voodoo practice: from baby-eating to witch-curses. Concurrently, many Dominicans emphatically reject the idea that racism partly defines Dominican-Haitian relationship.

Romance languages are famous for invoking visual imagery, symbolism, and subtlety in phrasings and word choice. In the Spanish-speaking world, the language maps out like a watershed: tributaries flowing from Spain to the Caribbean, from California to South America, and everywhere in between. The bedrock of European Spanish has long since been covered and mixed with “New World” sediments; verbal gems from New York City, Santo Domingo,  Boston, San Juan, Miami, Havana, and Los Angeles streets have nestled themselves into daily Latin American lives. A casual “hello” today in Mexico may be meaningless (or perhaps offensive!) in Honduras. The art of cussing would make a fabulous encyclopedia series.

A Santiago Monument-I wonder if these lights are always on!

Learning Dominican Spanish means developing an ear for its accelerated tempo, truncated invocations, vague generalities, and regular references to God’s will. Need directions? Forget landmarks and right-left-north-south. It is hard to get beyond “back there,” “up there,” “nearby” “sort of nearby” and “ up there, far.” Similarly, many things happen “soon” but when, exactly, remains unknown.

When the lights go out here at the Esperanza-Santiago office (almost every single day)—we all chime in with “se fue la luz” the light left (went out). While in English we also employ “the power is out,” “se fue la luz” uses the same phrasing as to say that a person has departed. This always leaves me with the sense that the light left on its own accord—you know, it decided to take a break. It wasn’t “shut off,” or lost. It just, left.

The reality is that power problems are chronic in the DR. The power plants and other infrastructure is insufficient. To keep the Santiago office running (or a similar enterprise), it is necessary to buy a set of  back-up rechargeable batteries (inverters) to make up for power deficiency. Of course, the back-ups will fail too. The Esperanza office manager and I are often up to our ears in delayed data-entry and email tasks.

The streetlight lets us know if we have power...if not...protestors might burn a tire or two

Almost everyone here in Santiago is vulnerable to power outages, whether you pay your bills or not.  In a few neighborhoods, local tigres “street guys” will occasionally light afire a tire or two in frustrated protest. They and the police will also sometimes exchange gunfire, on particularly caliente days.

For Esperanza clients, electricity—lack of it—is part of the status quo. Microfinance businesses are adapted to the circumstances—I have yet to meet a client who needs regular electricity to do business. Entrepreneurs sidestep the risk of relying on the unreliable—and its monthly cost. Women who sew clothes do it by hand or with non-electric machines, women with colmados (small food stores) do not invest in fridge-needy inventory. Beauty product peddlers, shoe sellers, and the women with home hair washing salons—they don’t require electricity either.*

While the micro-businesses mostly keep electric problems at arm’s

A home based nail salon--no electricity required!

length—it also becomes clear that electricity is like a “limiting nutrient.” How far can a personal colmado grow before it needs to sell cold beverages? Or a food vendor needs to buy refrigerated goods? Ice? Of course, Esperanza and other microfinance organizations prove very effective at these critical points—poised to provide the extra $500-$1000 for the backup batteries, freezers, and refrigerators via the microloan process.

office inverters, aka backup batteries. Pricey.

Having a business that does require a significant power supply—is quite a statement. Having more than backup inverters, and consistent funds to pay the electric company. The only places that seem to operate with 100% reliable electricity are places such as commercial banks, large supermarkets, and Santiago’s fully-loaded mall. For everyone else, improved infrastructure and power plants are also somewhere in the government agenda— perhaps something will improve “soon.” Until things get sorted out, the light leaves when it pleases.

That’s all for now!

Questions? Comments? Post ‘em!

Up Next: Stories from San Pedro de Macoris!

Cuidanse, take care,

Kalie Gold

Kiva Fellow, KF6 Dominican Republic

To fund Esperanza International Loans on Kiva.org please go to:

http://www.kiva.org/app.php?page=businesses&partner_id=44&status=fundRaising&sortBy=New+to+Old

* Postscript: Much more than electricity costs are out of reach for other Esperanza clients. In La Chichigua (the Kite) I met a brand new Esperanza village bank—who have named themselves Fey y Amor (Faith and Love). The community is planted in a verdant Santiago hillside—and is neighbored by a few luxurious suburban mansions. But La Chichigua remains outside of government oversight, the electric grid, and the city water pipes. According to a loan officer, this is one way to live cheap. La Chichigua residents risk mudslides and flash floods in order to live on squatted land, with a free hillside stream, and the “security” that they will be left alone.

Posted in Dominican Republic, Esperanza International, KF6 (Kiva Fellows 6th Class) Tagged: electricity, Kalie Gold, Santiago ]]> http://fellowsblog.kiva.org/2008/11/05/the-lights-went-out-for-a-walk/feed/ 5 kaliegold dsc00122 streetlight nail-salon backup-batts http://fellowsblog.kiva.org/2008/10/21/ingrids-house-contd-video-clip/ http://fellowsblog.kiva.org/2008/10/21/ingrids-house-contd-video-clip/#comments Tue, 21 Oct 2008 12:50:40 +0000 kaliegold http://kivafellows.wordpress.com/?p=1866 ]]> For anyone who wanted more visuals, I edited some short video clips from last week’s project…enjoy!

Ingrid's House

Santo Domingo

At 2:30pm yesterday I watched the Caribbean ocean rush past the airplane windows as we descended towards the Santo Domingo tarmac.  After a quick bustle through customs, an exchange of US dollars for pesos  (oh and no lost bags!)  I was quickly collected by two Esperanza International employees.  Tricia, (Esperanza intern coordinator), had housing, dinner, and a stop a the supermarket already planned out for me.  She and I went off and ate burritos, talked about college experiences in the DR and US, and compared notes on what we are thinking of for grad school (Tricia, by the way, speaks English rather flawlessly, has an undergraduate law degree, and plans for further studies of international trade).

Tricia drove me around part of Santo Domingo (SD), accurately noting that the city offers pretty much the similar amenities you’d find in a US city: KFC, TGI Fridays, Kia/Honda/Mitzubishi dealerships, gyms, overpriced gas, supermarkets, an Apple-affiliate store, an upscale mall, and very nice housing for $550/month.  Unsurprisingly, SD has wealthy , poor, and middle-income neighborhoods throughout.

To my Boston and New York friends,  and even those who have seen Italians drive; Dominicans in Santo Domingo are in a whole other league of… well…let’s call it, “traffic navigation techniques.”  1) Flashing headlights means “you better know that I am NOT stopping for you, under any circumstances” 2) Merge now, look later 3) use your horn like your voice box  (they are cheery sounding for the most part), 4) the police at traffic lights might as well be on their lunch break. 5) Using your brakes is very wimpy.   Anyway, as far as driving goes, I give  WORST or maybe MOST TALENTED award to the Dominicans.  I am not sure which to call it…

Flash forward to 6:00am today, Thursday.  I get together some outdoor work clothes–jeans, sneakers, t-shirt.  Tricia has arranged for me to go out of the city and see an Esperanza project in action.  Co-worker Pablo (an Argentinian, previously with Habitat for Humanity) picks me and Mark (volunteer from Seattle) up by 7:00am, and we head out for a day of floor-building.

We drove about an hour outside of the city, to a small underdeveloped community where we met Ingrid: an Esperanza microfinance client (but not specifically a Kiva.org borrower).  Esperanza has just started to explore housing loan products within their micro credit operations.  Mark, who has been here for about two months already, explained that Esperanza’s most creditworthy clients (those who have regularly paid back different loans over several years) are now able to request housing-improvement loans.  These loans can be more risky for clients, since they do not add to small business profits.  However, these improvements are vital to family well being and health.

It is important to understand the state of housing in poor communities, such as Ingrid’s.  First,  the “best” accommodations, (and she described this to me) what one would aspire to, is made of concrete blocks, solid roofing, a cement floor and a small cement patio in the front.  Forget multiple stories, doors between rooms, indoor plumbing, or glass windows.   A good house is shelter, in this context, a shelter that will last and that can be cleaned at will.  No cement flooring means a dirt floor-for bedrooms, kitchen, and the infant who wants to crawl around. Cement, by contrast can be readily scrubbed, swept, and cleared of bugs and chicken poop.  As for concrete blocks, these are much more durable than the cheap alternatives: tin siding or wooden board siding.  Both tin and wood slats do not endure over time.  I recall how on my first trip to the DR, my host mother and daughter cleaned the floor eight to ten times a day–it was an amenity not at all taken for granted.  That family also had over time upgraded from tin siding to half-concrete block (bottom) and half wooden slats (top).  The roof, as I recall, was tin, and any rain that fell echoed like cascading gravel over our heads.

Ingrid explained that she feels cautious about the housing improvement loans–her past success with micro loans has meant quite hard and dedicated work.  She cooks and sells local fast food.  For her to now cover both her current business loan and a housing loan will mean a constant and careful consideration of her finances, and of course, lots more hard work.  She explained her vision as “paso a paso” or step by step–doing what she can as her means allow, and being careful.  Eventually, she hopes she can improve all aspects of the house, but for now, the floor takes priority.

Making the cement

Anyway, the floor construction began very quickly after our arrival.  A local mason, Ingrid, her husband, and between three and four of Ingrid’s fellow community bank members (all women) came to lend a hand and provide moral support.  Then three more Esperanza volunteers arrived (American) with two more Esperanza employees.  Esperanza volunteers worked in front of the house mixing sand, concrete dust, and water together for the there rooms inside–where Ingrid’s husband and the mason dumped and smoothed the mixture.  All the commotion in front of Ingrid’s house made for a constant stream of neighborhood visitors–most notably the local children who alleviated our down-time with dancing lessons and clapping games.

Smoothing the Concrete

At one point, an older grandmotherly woman also stopped by, and offered me her story with microfinance.  Unlike Ingrid, this woman had not  been able to continue beyond one micro loan (with a different organization) because her sister (and business partner) had fallen too ill to work, and soon after she herself had suffered thrombosis in her left arm–which now hangs useless at her side.  She told me that there was no way for her to ever return to a microfinance program, because it is impossible for her to work.  This woman watched the floor construction for a while longer, and then told me that with all her difficulties, she prays quite a lot.  Prayer, she said, is her lasting comfort.

What a view!

The floor work was done by 3:15, we had started at 9:00am.  As we said goodbye, Ingrid took the time to thank all of the Esperanza volunteers and employees.  She asserted, “It is just a floor, but for me, for a woman, this makes all the difference.”  I believe her words reflected an important observation in the microfinance communities around the world–women will work for the whole family, for meaningful and long term visions.

In all Ingrid’s project took only a few days to complete: Mark and Pablo had discussed the loan with her on Tuesday.  She had received the loan, moved her furnishings to a temporary location; the work was started and completed three days later.  Tonight, she and her family will let the concrete dry, and they will move back in tomorrow.  Imagine if remodeling your  own kitchen only took three days and less than $500.…I guess you just have to say “context is everything.”

As  for me, I head out tomorrow (Friday the 17th) for Santiago.  I’ll be staying there and initiating my Kiva work at the Esperanza-Santiago office!

More to come soon!

Cuidanse, que vayan bien

Kalie

Time until departure: ONE MORE WEEK!

Take care,

Kalie

Hello from Providence, RI! I can report that the New England autumn is rolling in right on cue. It is a time of year that I will be a little sad to miss; it’s crisp, completely refreshing, goes deliciously with hot coffee and your most treasured sweatshirt. The season, the city, my former college campus (as of this past May) will each receive their own “goodbye for now” before I drive back home to Washington DC and then fly to the Dominican Republic (departure: Oct 15^th).

As many Kiva Fellows have reported—last week’s training was a standout experience. Our time was well-stocked with key agenda items—from learning specific Kiva internet technologies to understanding the Kiva vision, experience, challenges, and goals. I came out of the training with more respect for Kiva’s model than any other service or non-profit model I have worked with previously—Kiva is a place for innovation, creativity, humility, self-critique, patience, and very, very hard work.

What I Do Know…

It remains to be seen how everything in this Fellowship will work “on the ground.”

I did volunteer work in the DR in 2002, and got a summer worth of nonstop Dominican Spanish, food, dancing, sights, and sounds. In this way, I am fortunate, since I am not going to a completely unknown place. That first trip was something I could not have done without: complete with little to no electricity, no English, no plumbing, and nothing urban. I pretty much culture-shocked myself silly back then, at 17. Fast-forward through four college years of liberal arts studies, wanting to change the world, theories of globalization, a dash of economics, international politics, and studies of sustainable development (oh, and not to be left out: playing rugby, lots of it). Pause. Now a 23 year-old college grad, sick and tired of all that theory and macro-level data (and eternally grateful for the rugby) who’d just like and everything to be as hands-on as possible. Time to DO, not sit, time to work face-to-face, rather than read. Well, thank goodness for the Kiva Fellows program! In this light, the upcoming “unknowns” are very much welcome.

In specific terms, I know that I will be spending a good deal of time at Kiva’s partner institution, Esperanza. This organization has several social interests and activities, including microfinance. Esperanza is also a religiously rooted organization, which I have never before experienced. I’ll wait and see how those dynamics play out—and of course, I’ll write about it. The main headquarters are in the capital, Santo Domingo, and branch offices are spread out elsewhere. I expect that I will spend times in all of these locations, if not more. Below is the start of my DR map (I’ll keep working on it), with some of the areas where Esperanza/Kiva entrepreneurs are–(make sure to zoom!)

View Larger Map

There will certainly be a good deal of traveling to do! Perfect. More to come soon.

For the partner info about Esperanza please go here: http://www.kiva.org/about/aboutPartner?id=44

For the independent Esperanza site please go to: http://esperanza.org/us

Take care!

Kalie Gold

Kiva Fellow (KF6)

Dominican Republic

Since arriving in Santo Domingo last month, I’ve been immersed in an array of sights and sounds, faces and families, handshakes and hugs, cooking and cadence, and countless other alliterative elements of Dominican culture.  It’s been a whirlwind so far, and for about a three-minute moment everyday – the most time I ever seem to have to reflect – I can’t help but think that my familiar life in the states is being lived by some alternate version of me, and that eventually, he’ll bring me up to speed on the events of the last few months and I’ll tell him he missed out on the chance to bring all of his ideas and ideals out of the ivory tower and into the world.  Maybe we’ll have a beer or play bocce ball.  Who knows?  Clearly, I digress.

Of all the incredible and wonderful facets of Dominican culture that I have had the chance to take in so far, one that I am reminded of everyday really stands out…. everyone starts decorating for Christmas very early here.  Like really early.  Like right around Halloween early.

It was a horrifying coincidence when Tropical Storm Noel made landfall during the first week of November, just as the first Christmas trees and candy canes were visible in shop windows.  Noel came with virtually no advanced notice, and even if their had been a better warning I’m note sure what measures could have been taken.  Granted, Noel pales in comparison with what has happened since in Bangladesh.  But the victims here would take issue, just as they should, with anyone who told them that their loss is somewhere near the bottom on a phantom list of priorities that the world’s aid agencies have to look at. 

I have not been able to speak with members of the affected communities first-hand, largely because Fundacion San Miguel Arcángel has asked me to work mostly in other communities.  But I have seen some of the damage while traveling near the Manoguayabo River in Santo Domingo near San Cristobal.  The river swelled twenty feet over its average height and literally swallowed the earth beneath thousands of people’s homes.  Debris from homes remains scattered across the riverbanks, and where many people had lived on an incline that gradually rolled down to the water’s edge, half their homes are now precariously suspended off a cliff – a complete vertical drop, twenty-five feet above the river.

In some of these communities, school has only restarted this past week.  The recovery of physical debris and the job of rebuilding homes and businesses are daunting tasks unto themselves.  Confronting the sickness and disease afflicting many of those who have already lost so much is likely to be even more challenging.  Local food stocks were rendered mostly unusable, water supplies are barely potable, and all kinds of pests and pathogens fill what remains of homes.  Anecdotally, some of FSMA’s clients have been falling very ill.  All of FSMA’s clients are women and most are mothers, as well.

With a presidential election just over six months away here, the incumbent’s government has recently revised the latest measurements of Dominican GDP, announcing a rise in the country’s income per capita.  I don’t plan on using this space to casually opine on a political situation about which I am almost entirely ignorant, but that announcement struck me as one with potentially serious consequences for Noel victims awaiting international support.  The president asked multilateral development agencies for aid after the storm, but many of these agencies have strict GDP per capita limits they adhere to when making aid decisions.  It remains to be seen what effect, if any, the announced rise in income will have on the flow of aid.  Also, the government has promised the construction of public housing in the most devastated areas.  While a good long-term idea, that does not sound like a solution to the immediate issues facing those communities.  In both cases, we’ll see.

These photos were taken by the FSMA staff, they show some of the damage near “Control de La Pared de Haina” and “Palavé” on the Manoguayabo River.  

FSMA is a relatively new Kiva partner and from what I know right now, none of those people who suffered devastating blows to their families and livelihoods, including death and complete loss of home, are Kiva clients…yet.  Now seems like a good opportunity to diversify Kiva’s client list within FSMA to include more of the areas affected by the storm.  I hope to be meeting these women soon, and giving Kiva lenders the opportunity to help them restart their businesses.