Posts filed under 'ASDIR'
You have internet but no running water?
Someone asked me how it was that I seemed to have (almost) constant access to the internet AND no indoor running water or heat. From an American perspective, it seems irrational and contradictory. But, Guatemala is filled with (seeming) contradictions and contrasts. I suspect that many of my “fellow” fellows have experienced the same in the countries where they are working.
The family I live with has satellite TV, a wide screen television (and a television in every bedroom) but they have no indoor running water or heating. They still wash their laundry by hand in a lavadero, outside. They cook over a wood stove. The water for showers is heated by a fire lit under a big black drum, which they fill with water early, every morning (before the water runs out). They make their own masa from the corn that they grow. And they all have cell phones, MP3 players and their favorite “novellas” (soap operas) on television.
- Thatched roof home with satellite television in Tulate
The office where I work has internet access (including wi-fi) and right outside my window, there is an elderly couple working their land like it’s probably been worked for centuries—all by hand, living in an adobe structure (with no running water or heat). One of my most surreal experiences during this fellowship was the day I was sitting in my little office at ASDIR, uploading Kiva borrower videos to YouTube; listening to a loan officer explain the terms of a loan in K’iche and, through my office window, watching the elderly couple plant their corn.
- the view from my ASDIR office in Nimasac
At dinner, in the weeks before Easter, my host family would sit around the dinner table and listen to the story of Christ’s resurrection told in K’iche, being broadcast over a radio on someone’s cell phone.
The inside of their stores and homes are very tidy—almost meticulous. Yet, they don’t hesitate to litter pretty much anywhere and everywhere else.
- trash…it’s everywhere!
Lori Gibson Banducci is a Kiva Fellow, working with ASDIR in Nimasac, Totonicapan, Guatemala where she blends in perfectly with the people who live here.
Lori and Kiva Borrowers
10 comments 16 April 2009
Life in Nimasac Guatemala
So, warning, this has NOTHING to do with microfinance.
But, here are two videos that give a definite flavor of life here in Nimasac, Guatemala where I have spent the last two months as a Kiva Fellow with ASDIR, Kiva’s field partner in Totonicapan, Guatemala.
K’iche is the predominant language spoken here. Many people have asked me to describe what it sounds like, but I’ve found that to be an impossible task, so here is a short video of animated dinner conversation in K’iche.
The second is a glimpse at what is involved in washing clothes here in Nimasac (it takes a LONG time!)
Lori Gibson Banducci is a Kiva Fellow working with ASDIR, Kiva’s field partner in Totonicapan, Guatemala where she blends in perfectly with the people who live there.
Lori with Kiva Borrowers
3 comments 13 April 2009
Loan Officers: The Unsung Heroes of Microcredit
Long hours, low pay, angry barking dogs, collection calls, long motorcycle rides and even longer walks…………what on earth keeps these loan officers “in the saddle” 8+ hours a day, 6 days a week? I interviewed two of ASDIR’s (Kiva’s partner bank in Totonicapan, Guatemala) loan officers to try and find out.
I have to say I have been most impressed by the dedication, care and compassion of the loan officers at this MFI. I would also bet that most of Kiva’s 90+ field partners have similar, committed loan officers—- clearly motivated by a lot more than money!
Interview is in Spanish, with subtitles and, it will soon become clear that I was not selected as a Kiva Fellow on the basis of my video editing (or taking) skills.
Click on this link for more information on ASDIR
1 comment 7 April 2009
Access to Microcredit –the View from Nimasac, Guatemala
not all micro loans are life altering, but maybe micro credit is really more about making incremental changes in the lives and financial stability of the world’s poor.
Continue Reading 3 comments 1 April 2009
hot showers–not so simple
Warning: this post has absolutely nothing to do with microfinace. Just gives you a glimpse into what is involved with taking a hot shower here in Nimasac, Guatemala.
When I was first accepted as a Kiva Fellow, I was asked if I had any “special” requirements. My response was that I wanted to be relatively safe and be able to take a hot shower.
Taking a hot shower is no simple matter in Guatemala. First of all, most homes do not have running water. (this includes the family that I am living with). So, in that situation, here is how you get to take a hot shower. First, they run a hose from the closest water source (in my case about a block away from the house) and fill this black (20-50?) gallon drum up with water. Then you light a fire underneath the drum and wait until the water gets hot. This big drum is always located above the shower, as it is gravity fed.
Now it gets dicey……because without any cold running water to “mix in” with the hot water, instead of a “hot” shower, you can get a SCALDING HOT shower……..so, it takes some time to figure out exactly how big of a fire to build and how long after the fire has been built is it safe to take a shower…….go too soon and you get scalding hot…….wait too long and it’s tepid at best.
When there is running water, as there is at many hotels, they use this kind of an electrical contraption which is located right there in the shower, right above the shower nozzle. The one pictured here is one of the “safer” versions…..many have electrical wires portruding and a lot of electrical tape wrapped (sometimes loosely) around them. And, when you’re tall like I am and the water splashes on the exposed electrical wires, that too gets a bit “dicey”.
And, as long as we’re talking about “bathrooms”, I thought I’d share a photo of the outhouse that my host family and I use. (actually, it is quite pleasant, as the view from the crack in the door is of the beautiful countryside surrounding Totonicapan)
3 comments 21 March 2009
Illegal Immigration-the view from Nimasac Guatemala
It’s almost impossible to find a family in this little town of Nimasac (in the western highlands of Guatemala) who has not had a son or husband go to the U.S. to find work.
Boys often leave when they are teenagers (16 or so) and take the perilous route to the U.S. through Mexico, by enlisting the services of a “coyote” (immigrant smuggler)—which is a very risky proposition. If they do make it to the U.S. alive, they arrive in large cities (Houston and New York seem to be the favorites here) where they connect with acquaintances or friends who are already there. Many leave wives and young children behind. Many stay for years before they return……..some never come back to Guatemala.
In the U.S. they find work in restaurants, construction, landscaping and, most of them, faithfully send money back to their families in Nimasac twice a month. It is hard to imagine the impact of these bi-monthly “remesas” (remittances) on the families and the local economy. In fact, annual remittances from the U.S. to Guatemala are the second biggest driver in Guatemala’s economy—second only to exports, totaling $ 4.3 billion in 2008 (Sources: MIF, IMF, US Census International DataBase, Latin America Monitor).
You can look around this village and clearly distinguish between the houses that were built with American money and those that were built with Guatemalan money. (see photos below)
Families with sons or husbands in the U.S. can often afford to feed and clothe their families, send their children to school, have cement block homes with running water and maybe even have electricity. It is estimated that 43 percent of Guatemalan households receiving remittances have been lifted out of extreme poverty. (Source: Economic Commission for Latin America and the Caribbean (ECLAC)). So, these families are still poor (especially by American standards) but no longer among the poorest of the poor.
Remittances are projected to decline by 8% or more in 2009. In data just released by Banco de Guatemala, remittances for the first two months of 2009 are down 9.6 % compared to 2008. The impact of the decrease in remittances is profound and widespread and likely to get worse. Construction on many homes has simply “stopped” (putting those who were building the house out of work). Families can no longer afford to buy things, significantly impacting demand across the board, and especially the weaving, sewing and shoemaking cottage industries in Nimasac.
One Kiva borrower I spoke with said she used to have 35 individuals sewing/making parts for her shoes and now she is down to 15, with prospects looming of further declines. (She used her Kiva loan to pay her employees for work produced, but not yet sold due to lack of demand.) Another Kiva borrower had originally taken out a loan for leather and other shoe making materials, but the market for his product has all but disappeared. So he bought a loom instead—hoping the market for traditional fabrics “cortes” is more dependable. This is a young, industrious, positive young man with a wife and a toddler to provide for. But, demand is down, across the board, in almost every area of the economy here.
On one hand, I understand the associated “hidden” costs of illegal immigration in the U.S. I know that some illegal immigrants do not pay taxes and often times avail themselves of the education and medical care and, with the economic downturn, may be taking jobs from Americans who need the work. I also realize that, since some illegal immigrants are paid under the table and do not pay into Medicare or social security or income tax, we all “pay the price” for their use of our services.
On the other hand, I can also understand the desire of these young men to provide for their families, to improve their lives by immigrating to the U.S. (legally or illegally) where they can find jobs and opportunity. It reminds me of the situation that Jean Valjean finds himself in Les Miserables, when he steals a loaf of bread to feed his daughter.
As with most things, there are definitely several dimensions to this illegal immigration issue. And it is apparent from the Guatemalan side, that many families who had been able to escape extreme poverty are about to be thrust right back into it as remittances from the U.S. continue to decline. And, in the absence of “demand” for products and services, the ability for micro credit to make a meaningful difference in the lives of these people may be compromised.
built with $$$
built with quetzales
8 comments 13 March 2009
Not Easily Intimidated
The cooperative, yet fiercely independent, spirit of this mostly indigenous community in Guatemala.
Continue Reading 4 comments 4 March 2009
It’s the reasonable repayment plan-stupid!
Many of my friends and family have been shocked, when I explained to them that microcredit loans often carry (what we would consider) usurious/oppressive interest rates. Many of them have asked me how ANYONE could justify interest rates of 30 or 50 or even 100%?
I have tried to explain all the factors that go into how a microfinance bank determines just how much interest it must charge in order to remain a viable business.
I go through the litany of factors contributing to the “high” interest rates—-the fact that it costs as much (or more) to make a $300 loan as it does to make a $10,000 loan; that in order to reach the poorest of the poor, the loan officers must often travel long distances on back roads in order to serve this population(because these borrowers do not usually have transportation to get to the banks); how a microfinance bank must cover its costs if it is to stay in business and continue to provide credit to the poor, that inflation rates must be accounted for in order for the banks to even recoup the original value of the loan. Usually, their eyes glaze over, they remain unconvinced and they find it difficult to get beyond their shock at the absolute level of the interest rates.
So, yesterday, I listened to a loan officer with ASDIR (Kiva’s field partner in Totonicapan, Guatemala) explain to a couple how they would have to repay their 30% interest loan in 12 monthly installments and (this is the key) that with each payment the total amount due on their loan would get lower and lower, until it was paid off.
That is when the differences between credit card debt which most U.S. consumers use to finance purchases and the microcredit consumer loans became crystal clear! It’s not about the absolute interest rates; it is about having reasonable repayment terms, which pay off the loan!
Let’s compare two loans of, say, $1000 —-one done the microfinance way and the other the American credit card way. The microcredit loan is made at the apparently outrageous rate of 50%, while the credit card loan is at a far more “reasonable” 20%.
___________ Microcredit American credit card
Loan Amount 1000 1000
Interest Rate 50% 20%
Minimum monthly payment ($107.59) ($16.67)
Total Payments in one year ($1,291.02) ($200.00)
Amount owed after 12 months 0 $1,000.00
Total amount paid in 5 years ($1,291.02) ($1,000.00)
Amount owing in 5 years 0 $1,000.00
Interest Payments to Bank $291.02 $1,000.00
With a microcredit loan, a loan officer evaluates the financial position of the borrower and develops a payment plan that is reasonable. It is a plan that gets them out of debt in a relatively short amount of time. In contrast, in recent years, the credit card way has been to provide people with a credit line, encourage them to make purchases on their card (up to their limit) AND then encourage/allow them to make only the minimum monthly payment. Paying off the card/the loan is NOT encouraged. Better for the banks to keep them paying interest only.
After one year, the borrower with a microcredit loan has paid off her loan and has paid a total of $291.02 in interest. After one year, the American credit card borrower has paid $200 in interest and still owes $1000 on the loan. After 5 years, the American credit card borrower has paid $1000 in interest and still owes the entire $1000. Meanwhile, the microcredit borrower may have taken out and repaid another loan or two, while the credit card borrower is still paying on the original loan!
Ends up the lower rates, but totally open-ended repayment terms are far more onerous for the borrower (and beneficial to the bank in the short term) than a significantly higher interest rate with clear and closed-ended repayment terms.
I don’t know if this will change the minds of some of my doubting friends and family, but, I think it illustrates how banks can charge interest rates high enough to cover their costs and risks, while still benefiting the borrowers who must pay the interest. It is truly a win-win, even if it may not seem like it at first glance.
For more information on microcredit interest rates: http://www.cgap.org/p/site/c/template.rc/1.26.2617
9 comments 23 February 2009
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