By Prem Thomas, KF9, Philippines

Yesterday I took a trip to a CCT Kiva branch located in Caloocan, about 2 hours north of the head office in Manila. CCT offices often have inspirational posters and signs, but I thought this one was very relevant to Kiva.

Kiva lenders have good character: “They lend money to those in need without interest.”

Here are links to updates on some of the borrowers in Caloocan that have benefited from Kiva loans:

Teresa Barola: video game arcade owner

Genie Tabarangao: sari-sari (general) store owner

Gloria Espayos: news and spice stand operator

Prem Thomas is serving as a Kiva Fellow working with the new field partner Center for Community Transformation Credit Cooperative (CCT) in Manila, Philippines.

To view currently fundraising loans from CCT click here.

You can also join our new lending team here.

By Suzy Marinkovich, KF8 Peru & KF9 Bolivia

Twisted twining vining metal unrhythmic untamed unkempt and in comes the dust sweat and sticking to me tires thumping each rock unsettled plastic bag squeezed empty tossed out the window just a drop of papaya juice leaps back clings to the dirty car door parting from the white stretch of plastic mangling on wire scraps whose posture, never organized nor structured nor retreating but insistingly unfinished uncared for undone and meters behind she rests her worn hand with dirty fingernails on the back of her velvet skirt, flicks her foot backwards knocks a stone out of her rubber sandals, presses forward to check the corn, pounding sun hits a thirst for chicha it must be the corn that reminds, wander on to the cement stable over the manure dried and dusty walking cautious to storage bright orange plastic bucket brought in the kitchen, drink in the cup take a sip after first a splash on the soil, thank you Pachamama for the gifts you give. On Sunday on to the feria de ganado new ternera baby cow more milk, burning expense but its California cow genes worth their weight in silver the promise of more milk more money versus more mouths to feed its always tiresome, the more and more. Our needs don’t stop she thinks our needs increase I need to provide I’m in demand, must keep milking the cows keep working. Flash of heat and so dizzy, still the morning she feels the baby kick, stops to smile only for a flicker in a rare moment blinks and next.  She must toil forward labor on work more press harder no rest no stopping I hope my baby is okay her heart thumps she lost the last two, tried to be cautious but what part of her day strains the baby the most, either way she must labor on toil forward no time unused the love is there no she cant dream just hope her child hangs on hope he is a boy whose hands can work on the farm as she slows, the latest loan for the latest cow and the latest payment for the latest month why let herself dream of getting a milking machine she knows her husband wont no not until who knows it isn’t going to happen why dream when dreams are small and the smallest thing swimming in your belly is struggling to survive in your overworked body, its hard to give when you never got the chance to take, its hard to take when no one offers you money and no one trusts you.  the loan feels freeing but chaining but straining to pay each month the interest where did these people come from.  what will you do for me I don’t have identification I don’t own a home I don’t know how to read the paperwork, what will you do if I cant pay what will you do to me. But Im not going to lose this baby I cant bear another loss I cant work and lose and work and lose. Why do you trust me I cant even care for the child growing in me, why do you give me a chance why do you believe in me, never finished grade school I can hardly write its been so many years since I’ve had the need, why are you trusting me to repay you why are you giving me the chance. Why are you smiling at me, why are you here, why are you believing in me. Why are you giving.  Letting me do this.  I’ve no capital to my name nor education just working hands and mouths to feed, I have responsibilities but no way to care for them, no one believes I’m worth a dime but you do, you just appeared here, even with our impassible road.  Where did you come from, just please stay for dinner I am making chicken you are like family now please, only family could trust someone so much, you are giving me a chance please take my food, why do you loan to me I just want to suspect you but your smile your papers it feels real that you care, this isn’t my reality this isn’t even the hand of cards I was dealt.  I feel worthless now empowered once selfless and given the chance to be selfish.  Her mind flickers again for a brief moment that milking machine could be possible someday it really could let me just talk it over with my husband then he kicks again in my belly we are going to make it mom, we are going to make it together sign the paper, they are believing in you like I believe in you and its real.

Since I started with CIDRE this September, a brand new Kiva partner in Bolivia, I have watched this remarkable microfinance institution use the new funding from Kiva to venture into more rural and inaccesible areas.  I have helped — quite literally — get out of the car and clear the brush so that CIDRE’s car could get through washed out roads in unfamiliar territory.  I have sat in on several dairy cooperative meetings out in these areas, where CIDRE’s loan officers speak in Quechua about all CIDRE can offer the farmers.  I am truly honored to work with the incredible organization that is Kiva, because say what you might about its flaws, I have personally seen how the river of loans from Kiva lenders leads to reaching new areas untouched by the financial system.  I am humbled to have had the chance to meet these newest borrowers, and I can’t thank Kiva lenders enough for allowing our MFI partners to push frontiers and cross into the lives or the worlds’ most rural poor.

Click here to help fund a CIDRE borrower on Kiva.

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Suzy Marinkovich is a Kiva Fellow at CIDRE in Bolivia, the second of her three placements.  She has a wholehearted passion for microfinance, social justice, and poverty alleviation.  Suzy is most excited to listen to the incredible stories of Kiva borrowers in South America and let them know how much they continually inspire us all.

By Julia Kastner, KF9 Mexico

When Kiva first started, all of its loans were to individuals.  Borrower A asked for X dollars and voila!  Person A got a Kiva loan.   Over time, however, Kiva’s been working with more and more MFIs, and the number of different types of loans and lending models has been increasing.

Watch a meeting of a community bank (a.k.a. UDE):

As Kiva explains:

“In a group loan, each member of the group receives an individual loan but is part of a group of individuals bound by a group guarantee. Under this arrangement, each member of the group supports one another and is responsible for paying back the loans of their fellow group members if someone is delinquent or defaults.”

So,  how is an UDE different from other group loans?  Why is an UDE helpful? And how does it work?

These are the questions I’ve been asking folks here at FRAC for the last two months, and this is what I’ve learned…

Here at Fundación Realidad A.C. (FRAC) in Mexico, there aren’t any individual loans at all, just group loans, and there are three kinds: (1) Family Loans for family businesses (usually 4-5 people), (2) Solidarity Groups (also 4-5 people), and (3) Communal Banks (“Unidades de Desarollo” or UDEs for short, with 10-30 members).

At FRAC, UDEs  have a governance committee of at least a president and a treasurer, and they meet more frequently than other groups (once a week or every two weeks).  Each UDE has its own separate bank account, and the governance committee is responsible for making deposits when payments are due. FRAC requires that every group deposit 10% of their loan at the beginning of the transaction as a guarantee, and members who wish to reapply for larger loans in the future are required to continually make savings deposits.  Many group policies, like optional additional member fees for the governance committee’s travel expenses, late payment fees, and fees for late attendance at meetings, are decided by the group through consensus at the loan contract signing.  I’ve witnessed meetings of both brand new UDEs and four-year-old groups, and it’s clear that these community banks really are based on the idea of “community.” Members are usually neighbors, often a few relatives, and they have known each other for a while.

There are a few main advantages of having a really large group loan. In group loans, the whole group is responsible for repayment, so spreading out this responsibility over a larger group makes the burden smaller for each person if one member defaults. Repayment rates to FRAC may be higher, as it is less likely for a whole UDE to default.  The group can even become an insurance system if group members become sick or work sours.  Also, the larger the group for a loan, the lower the cost to FRAC for each member.  They can have one repayment meeting for 20 members instead of 2 meetings for 10 members each, and they can rely on the governing committee to help with much of the loan administration.  FRAC’s loan officers have also told me of the value of the leadership experience for UDE governors.  As the president and treasurer (often women) take responsibility for the financial success of the group, they also become a community leader in general. I’ve also noticed that UDE meetings can become economic opportunities for the developing entrepreneurs – members bring their merchandise to sell during meetings (I’ve seen everything from snacks and drinks to purses and handicrafts exchanged). In one group, one member grows borrego (a lamb-like animal) and another purchases the borrego for her barbecue stand.

Unfortunately for FRAC and similar MFIs, uploading an UDE loan on Kiva can be a bit difficult. FRAC’s loan officers need to upload a lot more information for each loan (e.g. the quantity per borrower), and getting a good picture on the website can be tough, because Kiva requires that 80% of the group be present in a picture. For a group with 20 members, that’s getting 16 independent entrepreneurs in one place at the same time! When the group meets, often members cannot attend the meeting because of work, so they send a friend with their money. For Kiva, however, they have to be there in person! If you’re an avid Kiva lender, you’ve probably seen that some MFIs are starting to split members from their UDE. For example, this loan states that the borrower is part of a community bank. FRAC can’t split its loans, though, because it only tracks the group as a whole, as part of the UDE communal responsibility system.

I hope this clears up a bit about group loans and community banks. Let me know if you have any thoughts and/or questions! And for further reading on all the microfinance lending models: http://www.gdrc.org/icm/model/1-credit-model.html.

by Rachel Brooks, KF9, Kenya

My favorite Kiva field partner before I started my fellowship was Kisimu Medical & Education Trust, here in Kenya. At K-MET, microfinance is a smaller part of a community-based health organization. They offer loans to providers (many of them volunteers) so that they can maintain or improve their clinics and services. And they have these wonderfully innovative programs to help women and improve reproductive health.

But as much as programs like these make me go weak at the knees, I’ve also really come around to loving what the scope and focus of a big MFI can offer. Big is beautiful.

Faulu's Director holds the BIG certificate

Faulu Kenya has more than 90 outlets across the country, over 1000 staff members, and a fairly large headquarters. They are laser-focussed on providing financial services to low-income people, with over 250,000 clients. They want to reach a million clients by 2011.

In a country that is as bountiful and still so poverty-stricken as Kenya, a million clients starts to seem like a good start. Each day, though I get very encouraged by the stories I read about and hear from individual clients, something will drag me back down to Earth. I’ll get a good view of Kibera, the largest slum in Africa, or read that children are dying of something as ancient as cholera in Mukuru, or watch starving Masai cattle shepherded into the city to nibble on brown grass by the airport. Then I’m very glad for Faulu’s big ambitions.

An MFI like Faulu also has the resources to offer really critical training. Before borrowers can take their first loan, they complete a full two day seminar. They pay Kes. 400 (about $5) and they get probably the only training they’ll ever receive on business management, record keeping, customer care, group relations, how to save, and defining a vision for the future. In short, information that could really make your business a success so that you can provide for yourself and your family.

But probably the biggest boon for Faulu is that they are Kenya’s first Deposit Taking Micro-Finance Company under Kenya’s Micro-Finance Act. This just means they can offer savings accounts and re-lend the money. In Kenya ninety percent of the population hides their money under the mattress (and other secret places I can’t reveal), so being able to open an account with Kes. 200 (about $2.50) and earn up to 4-6% interest is important. In interviews, clients have consistently reaffirmed how vital simple access to savings has been to them.

Organizations like K-MET and MFIs like Faulu both make tremendous contributions and Kiva gives them some of the attention they deserve. CLICK HERE to see more examples of the work Kiva field partners do.

Rachel Brooks is a Kiva Fellow working for Faulu Kenya in Nairobi. Don’t hesitate to join the Friends of Faulu Kenya Lending Team.

By Mohammed Al-Shawaf, KF9 Palestine

Before proceeding, let me first state that this is not a political blog.  I neither have the expertise nor desire to engage in the complex web of conflict–latent or otherwise–that surrounds the major events of the last decade in Palestine.  I will attempt to reference and explain only the events that help me tell the story of the resiliency of the Palestinian microfinance sector and in particular, of Ryada.  I implore those interested in learning more to do just that.  Although it requires a bit of fiddling around, the Google News Timeline is a fine tool that allows you to view major news headlines filtered by keywords and timeframes.

When I was 3, Hurricane Hugo wreaked havoc throughout the Southeast region, enveloping my hometown of Charlotte, NC in its wake.  I can even recall a picture of myself standing next to the shriveled stump of what was once a broad, formidable tree that overlooked my grandma’s house.

Lately, I’ve been thinking about contingency planning. I can’t remember what my family did in anticipation of that storm, but I’m sure it was something.  For homes chronically threatened by hurricane season, preparatory measures are often taken: supply kits are filled, windows are reinforced and sandbags are at the ready.  But what would happen if these homes were just as likely to succumb to blazing fires as they were to hurricane flooding? What if it instead of a natural disaster, a plague swept through the region?  What about a war?

Welcome to Palestinian microfinance where contingency plans are made for crises unimagined.

The disaster preparedness metaphor stems from a talk I had with Izz Tawil, Operations Manager of Ryada.  Izz has worked in microfinance for over 14 years and started in the industry as a loan officer.  During one of our many eye-opening talks, he spoke about the difficulty in planning for a “worst case scenario” because it would presume that he (or anyone else in the industry for that matter) knew what that scenario would look like.

“There’s always a different crisis that arises here and each time it’s new, so you can’t plan for it.  [Over the last decade it's been the] crisis of intifada, then of a new government, then of the salary crisis [as a result of the new government], then Hamas’ takeover in Gaza, then the Gaza war…”

Sector-specific data is hard to come by for this entire period.  But in 2005, the Palestinian Network for Small and Microfinance (Sharakeh) began publishing industry-wide figures that show the extraordinary effect one of these crises–the salary freeze across Palestinian Authority (PA) employees–had on the industry and economy as a whole. 

Following Hamas’ win in parliamentary elections across the West Bank and Gaza in January 2006, western aid to the PA was largely halted.  The freezing of these revenues streams, which previously flowed from the PA’s coffers to the salaries of its 165,000 employees meant that roughly 30% of Palestinians were no longer receiving paychecks.

Although that number in itself is shocking, it is only tells part of the story.  To make the effect of the crisis clear to me, Izz sketched a rudimentary diagram of the Palestinian economy (reproduced below).

"Closed Cash Circle" During Salary Freeze ('06-'07)

Izz refers to the economy as a “closed cash circle” where sectors rely on each other’s transactions for survival.  Although outside revenue streams exist, they are few and very specific.  Traditional revenue generators like tourism and exports are non-factors. Instead, it’s aid and to a lesser extent, remittances from Palestinians living abroad and sending money back to their families.

When the new government was elected, the “aid” spigot went dry.  But political pressure was also placed on banks to stop transferring money into the country.  So turn off the “remittances” stream as well.  The Palestinian economy was now truly a “closed cash circle.”

But as gloomy as this scenario sounds, shouldn’t microfinance, a sector that touts private enterprise and “bottom-up” development, be the one bright spot in this economic malaise?

Recall that if you worked in the government– nearly 1 in 3 Palestinians–you no longer had an income.  The effect on the microfinance sector from this vantage point is direct and unmistakable.  If you had a home improvement loan (from Ryada or any other MFI), monthly payments weren’t anywhere near the top of your priorities.

The indirect effect is less obvious, but no less significant.  Family bonds play an important role in Palestinian life.  So if you could count yourself as fortunate enough to still be receiving an income–in the form of a private salary or as a small business owner–you were obliged to help your brother or your sister or your cousin or any family member less fortunate than you get through the crisis.

To illustrate this case, let’s say you owned a retail store that sold cosmetic products. You took out a loan to diversify your product offerings and purchased higher-priced imports.  Once the freeze hit, your brother lost his salary so your disposable income went to support him and his family.  From a business perspective, you also lost 1/3 of your market.  And as for the remainder–those still earning an income from the private sector–they’re facing the same economic conundrum you are.  So what about that loan?

PAR value, or Portfolio at Risk, is one of  the most popular statistics in judging the portfolio quality and performance of microfinance institutions.  The microfinance policy center at the World Bank, CGAP, states that a PAR 30 (meaning the portion of the MFI’s portfolio whose payments are more than 30 days past due) “above 5 or 10% is a sign of trouble…[because] high delinquency makes financial sustainability impossible for an institution.  

In 2006, the Palestinian microfinance sector’s PAR 30 was 47%.

How did it rebound?  And what planning, if any, is being done to mitigate the next crisis?  Stay tuned.

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Join the lending team Palestine and help us reach the 100 member mark by year’s end!

Follow Mohammed’s experiences in Palestine on Twitter @moshawaf

Mohammed Al-Shawaf is serving as a Kiva Fellow with Ryada and FATEN, two new field partners based in Ramallah (West Bank).

By Meg Gray, KF9 Nicaragua

It rained all weekend in Managua. It rained because of Tropical Storm/Hurricane Ida, which hit Nicaragua’s Atlantic coast on Thursday. You may have heard about Ida because your saw it on the news or read about it in the paper. Or maybe, like me, you learned about it via an alert from the US Embassy in Nicaragua. In my mind, Embassy Alerts are code for “things to start worrying about if you aren’t already.” Written in a calm, informative tone, the alerts are as alarming as they are pertinent. In my five weeks in Nicaragua, I have received alerts on three topics:
1. Tropical Storm (soon-to-be Hurricane) Ida
2. Mobs Attacking the US Embassy
3. Dengue Fever Outbreak

The most recent alert about Tropical Storm Ida was also the least troublesome in terms of my personal safety. Geographically, Managua (where I work in CEPRODEL’s main office) is roughly 300 miles from Nicaragua’s Atlantic Coast where Ida hit. The moment I got the email my mind flashed to Hurricane Mitch, which hit Nicaragua in 1998. It is estimated that Mitch caused about $1.5 billion in damages including the destruction of nearly 70% of Nicaragua’s infrastructure. The alert indicated that there was a 20% chance that Ida would become a Category 1 Hurricane before landfall. A repeat of Mitch would be catastrophic for CEPRODEL’s clients, not to mention Nicaragua’s entire economy. Luckily, my initial paranoia didn’t pan out. On the Atlantic Coast, roughly 1,000 homes were destroyed, 5,931 hectacres of crops were wiped out, and no deaths have been reported. In Managua, all we got was a rainy weekend, which some people were happy about since they are in the middle of a drought. Overall, this Embassy alert proved to be useful and informative, though I personally was not in harms way.

The first two alerts I received were both more alarming. About two weeks ago, I got an alert titled “Political Protests at the US Embassy.” That doesn’t sound so bad, so I looked it up in La Prensa (one of  Nicaragua’s largest newspapers). I didn’t have to look far since the home page was full of pictures of angry mobs of people throwing homemade bombs at the Embassy. Until that moment, I had always found it comforting to know that, in case of an earthquake or hurricane, I lived a mere 15 minutes walk from the Embassy. With the knowledge that “protestors have thrown bottles and other objects, and launched explosive “morteros” at the Embassy.  Local police thus far have made little effort to control these demonstrations.,” it felt much less comforting. When I read “political protests,” I thought of people with signs and catchy slogans, not “morteros.” The actual alert was both alarmist and calm. Urging people to stay away, but also giving no real reasons for the attacks. (It turns out the Ambassador made a comment about a controversial decision the Nicaraguan Supreme Court made). After several days, however, the rioters dispersed and I could check political unrest off my list of worries.

The first alert I received, titled “Dengue Outbreak,” has proved to be the most worrisome. This unpleasant and potentially deadly disease is spread by mosquitoes. When I first read the alert, I breathed a sigh of relief. I hadn’t seen a single mosquito since I arrived. I had also seen news footage of my neighborhood being fumigated. Though the fumigation left a troublesome image of men without gas masks spraying toxic chemicals all over my house, it did make me feel better about Dengue Fever. Within minutes of getting home that night, however, I had five mosquito bites. Now, despite living with a constant coating of bug repellent, I get a bite every day or two and with each bite comes a bit of paranoia. Was that the mosquito with Dengue Fever? If yes, does it have the generic kind or the hemorrhagic, sometimes fatal kind? It is good that I wear bug spray now, so thank you US Embassy.

As you can see, the alerts are both illuminating and at least moderately alarming. In a way, the alerts also emphasize some of the obstacles facing Nicaragua. They have told me, in a nutshell, that I should be worrying about natural disasters, political unrest, and obscure tropical diseases. Any guesses what my next alert will be about?

Meg Gray is a Kiva Fellow in Nicaragua working for CEPRODEL. Consider making a loan to one of CEPRODEL’s entrepreneurs or learning more about Kiva.org.

By Brian Kelly, KF9, Armenia

Not very good, at least in some of these Armenian villages I’ve been dropping in on lately.  Have you smelled a chicken coop, or a sty filled with 20 pigs lately? It’s tough to carry a conversation in there.  Visiting borrowers, at least in Armenian villages is quite the sensory overload.  You will smell more than you hoped to, probably taste something you never expected to, and perhaps hear a story that will inspire you to start your own apricot grove.

Haaaayyyy. This will feed the animals throughout the winter, looks tasty

Kiva does an interesting thing.  It helps put stories to the often boringly academic discipline of microfinance.  Without the stories, Kiva would struggle to fund loans as quickly as it does.  They help to strike a chord inside of us that increases willingness to lend or donate because of a connection felt on a human level.  But you probably know all of that already, (or have read some of the chatter) and this spiel sounds all good and nice, but what does a loan really LOOK like.  What does it feel like, taste like up close?  How is access to credit really affecting the borrower?  Well that question is one of the unique opportunities that Kiva Fellows get to ask and hopefully attempt to answer.

A microloan morphs into something much more visceral when you are trudging through a muddy sty and meeting a 200 pound pig, dodging frenetic chickens scrambling from their pen, or stepping over a field of manure that smells something awful.  When the borrower pulls a carrot out of the ground after 10 minutes trying to explain what the hell he grows, and I exclaim, “ohhhhh a carrot!!” the cerebral statistics and studies of microfinance start to fade away.  Shaking this man’s weathered hands and seeing his big smile when talking about his business, it feels more like carrot growing 101.  He goes on to describe his hopes to start his own stand at the market, so he doesn’t have to rely on other re-sellers.  And with this view, these sights, sounds, and smells of someone’s livelihood, you start to forget about terms like “loan” or “zero percent capital” as you become more immersed in their everyday operations.  You see that these borrowers are tirelessly working to improve their business however they can, and it just so happens that a “microloan” is the means to get it done.  Sometimes I feel sheepishly western when asking credit officers or employees about “microfinance,” because here it doesn’t necessarily feel like that magical poverty-fighting tool I learned about in school.  Instead, I simply see a means of improving businesses that wouldn’t otherwise exist in Armenia.  And you start to witness the tangible improvements borrowers have made in their business, and hear about everything that wasn’t here ten years ago.  Smiling faces, unanimous thank yous to the MFI and the universal phrase: “I simply couldn’t be here without the MFI, there is just no way any of this would be possible.  Everything here, (pointing across farmland that stretches to Turkey) is because of my loans….”

Visit after visit, I keep becoming aware of the “human factor” that has proved to be absolutely paramount to microfinance in Armenia.  Whether its spotting the nuances in how the borrower values her family, or a group’s good standing within their thousand person community, to how a villager might dress when applying for a loan, these all affect the ability to get credit as much as any chart-topping FICO score would.  The credit officers relentlessly make themselves available to answer their client’s needs in villages as far as 50 kilometers away, because there is no other way to do business other than face to face sometimes.  When making these visits, the drams and dollars start to fade away and you realize that this is all about relationships, and that the success of these businesses is hinged upon them.  Becoming aware of this human factor and the sights and sounds of a borrower’s business helps us to learn more about them, and I am willing to bet there is a direct correlation between the amount of human interaction I had learning about a borrower and the time I spend scraping pig crap off my shoes at the end of the day.  The loan fades into this ancillary construct of threshold maximums, amortization tables, and repayment dates.  Instead I see a rack of clothes imported from Dubai to increase a shop owner’s Fall line, an extra acre of farmland to diversify into livestock on top of the grape-growing business, a new shop at the corner of a busy intersection instead of selling floral arrangements out of the home, or the marked-off space where expensive equipment will be installed to build out a new chicken coop.  And these sensory experiences, often in the form of some less-than-pleasant smells, provide a perspective that can’t be found in the head branch office of an MFI or an academic journal debating small-scale credit’s effectiveness.  These visits have taken on all of the sensory characteristics that something that the word “loan” can never quite encapsulate.  You start to smell the business, feel the weathered hands of the hardworking farmer, and sometimes taste the freshness of the produce that is shoved into your bag by the notorious Armenian hospitality.

This man could have talked about carrots all day long

Now, I’ve tried to be wary of the fact that I may be viewed as the foreigner representing $$$ from far-away lands that one must smile and do a little success-story song and dance for.  OK, so lets play the role of the skeptic and assume the loan officers only take me to their most successful clients.  Suppose there are “bad clients” that I’m not being shown, or mediocre clients even who are just scraping by.  If this were the case, then where would the incentives be for the MFI to keep operating in the region?  We have to assume that these clients would present a financial burden on the MFI that when scaled up across 20,000 clients would not make running a business in this market lucrative in any way.  And in the case of an MFI operating as a for-profit, central-bank regulated entity like the one I’ve been seeing, delinquent loans would be too costly to the business.  Margins are thin in microfinance, so without successful borrowers, MFIs don’t stay afloat.  So while I may be toured around and shown the crème de la crème (and I’ve tried to tease out examples of late payers or failed businesses) I am confident that the sample of clients I have seen really does prove encouraging progress here in Armenia.  And at the least, these top 10% success stories provide encouragement and a precedent for the rest of their village or greater community that there is hope to break through this otherwise grim economic environment.  And to put it as eloquently as possible, I think that is most awesome.

As a Kiva Fellow who has been lucky enough to see these borrowers and loans firsthand, it really has put “microfinance in Armenia” in perspective.  Statistics turn into stories and you forget about questions like “does microfinance really work?” and “why are interest rates so high?” as well as all of the other academic jargon that comes along with development.  Instead, the human side continually reemerges as the defining thread of each borrower visit.  And maybe the need for stories and descriptions is a human weakness on our behalf as lenders, but it still doesn’t disregard the fact that these businesses are expanding, consistently graduating to higher loan amounts and taking pride in the fact that they don’t have late payments.  So if stories help expand access to improving businesses in places like Armenia, then I’m all for them.

An example of a client making Lavash, the delicious bread of Armenia, in her home oven:

Brian Kelly is a member of KF9 serving his Kiva Fellowship in Armenia to help bring pilot partner Aregak UCO onto the Kiva website.  To join the Armenian lending team, click here.  And to see more about Armenian loans, check out Nor Horizon UCO, and click here for fundraising loans (you may have to come back as they are new too)

By Julie Pachico, KF9 Mexico

A big part of the loan officers’ work load at FVP is “prospectando,” or heading out into the field and reaching out to potential clients. When I was first invited to come along I was a little nervous, as my career as a canvasser lasted for all of one day and I hate pushy sales people, no matter how good the cause. However my fears were rapidly relieved within minutes of accompanying the loan officers on their door-to-door visits. Their attitude isn’t that of aggressive marketing, but rather stems from a genuine concern and desire to help. Their message isn’t so much “invest in this program,” but more along the lines of “here’s this really great microcredit service offered by this organization, have you ever heard of it?” Here is a simple video I made of “prospectando” with the FVP loan officers in the Voluntad y Trabajo neighborhood , on the outskirts of Nuevo Laredo. You can read more about FVP’s method of finding new clients behind the cut.

Going door-to-door. This person actually already had an FVP loan to improve their house, which is looking pretty good!

Loan officer usually head out to “prospectar” two or three times a week and work for anywhere between three to six hours in different neighborhoods: handing out fliers, explaining FVP’s interest rates and repayment plans and setting up appointments with people interested in taking out a loan. I was very impressed by the professional yet personable way with which the loan officers publicize FVP’s microloan program. Loan officers always start off by asking how the family is dong and really express a genuine concern on the status of a person’s business. Many times when we met someone who worked as a foreman, the loan officers would tell him that they could help him get in touch with families who have a housing loan with FVP and needed a foreman for their construction project. It was really moving and inspiring to see this small yet important gesture, helping people find badly-needed work!

The loan officers aren’t the only ones out and about promoting FVP; there’s also Don Pedro. Don Pedro has already had two loans out on Kiva and his third one is set to appear very soon, so be sure to keep checking!! He works in the publicity business, which is to say that he drives one of those ubiquitous cars with the loudspeakers that blare a recorded message enthusiastically espousing how amazing their product is and yes, ladies and gentlemen, it would really be a huge mistake for you not to purchase it right away. (This type of publicity is very common in Nuevo Laredo; instead of needing an alarm here I’m usually woken up by a man selling vitamins driving by my apartment around 7 AM.) Don Pedro used his Kiva loans to purchase his sound system equipment as well as the vehicle he currently uses; he is definitely putting it to excellent use. It was really awesome to see FVP employing one of their own clients to help publicize their services; it really proves how they like to keep things in the “FVP family.” As another example of this, the voice you hear in the video praising FVP’s virtues is that of Don Pedro’s granddaughter, who also is also a Kiva borrower and works for a radio station. She’s only in her early 20’s and I hope you’ll agree with me, she has a very long and successful career in publicity and voiceover work ahead of her!

The map in FVP's office of Nuevo Laredo.

In almost every case I’ve seen during the “prospectando” trips, people are genuinely interested in learning about FVP (when they’re not it’s usually because they already have a loan!). The loan officers usually ask “Have you ever heard of FVP before?” and unless the person has a neighbor or family member that already has an FVP loan, the answer is almost always no. This lack of knowledge among the peripheral communities of Nuevo Laredo reinforces the need for the loan officers to be on the ground and spreading the word from door to door. If they weren’t doing this then I honestly have no idea how these families would learn about FVP’s microfinance program. Usually the people who haven’t heard of FVP (the folks who live in the outlying, underdeveloped neighborhoods) are the people who need a loan the most. These are the neighborhoods that didn’t exist ten years ago, the ones with the unpaved streets, where hardly anyone works in the formal economy, instead finding work as foremen (in the case of the men) or selling herbal remedies (as the women do). In these areas a loan can go a long way in helping a woman start another business from her house, so that she can still take care of her children but generate some extra income at the same time. But before you reach that point, you’ve got to get out and spread the word first, so that people can know that microfinance is a genuine option for them!

You can help SPREAD THE WORD about Kiva by inviting a friend and family member sign up today and make a loan! Don’t forget to check out FVP’s currently fundraising loans and join our lending team, the FVP Incredibles!

By Zal Bilimoria, KF9, Ecuador

Over the past four weeks here in Ecuador, I’ve had the opportunity to see much of the country, starting out in Quito working at Fundacion ESPOIR’s administrative office, and now in Portoviejo near the coast to conduct borrower verifications and write journal updates, among other tasks.  Since Ecuador is a relatively small country (roughly the size of Nevada), it’s easy to travel by plane or bus, usually within 4-6 hours to most major cities. This past weekend Kiva Fellow Kimia Raafat and I made our way to Cuenca for the long holiday weekend, where Dia de los Muertos (“Day of the Dead”) and Cuenca’s Independence Day were being observed. Day of the Dead (this past Monday, Nov 2) is a time of remembrance of loved ones who have passed away and a celebration of their lives (no connection to Halloween), while their Independence Day (Tuesday, Nov 3) marked Cuenca’s liberation from the Spanish Empire nearly 200 years ago. Easily the best weekend yet and the most beautiful city in Ecuador, in my opinion.

Enjoy this video montage of our Cuenca-stic weekend!

Zal Bilimoria is a Kiva Fellow based in Ecuador working for Fundacion ESPOIR. Consider making a loan to the working poor of this South American country.

By Prem Thomas, KF9, Manila, Philippines

After visiting many Kiva CCT borrowers, I noticed a trend that the primary business requiring a loan is not the only source of income. In the Philippines side jobs are referred to as “sidelines” or “extra income”. I have met a teachers who also sell clothing, farmers who rent out their plows to neighbors and a TV repair shop that sells ice in plastic bags during hot months. Of the CCT borrowers I’ve met, about half will have some sort of sideline.

Myrna Valencia used her entire Kiva loan to purchase inventory for her Personal Care direct selling business which she sells for a 25% markup. Myrna also has one of the more interesting sidelines I have scene. She recently completed a medical reflexology course and takes blood pressure for her neighbors on Monday, Wednesday and Friday mornings for 10 pesos (about $0.22 USD):

Looks like things are still okay after a month in Manila.

Myrna also provides massages to her community for 150 to 200 pesos ($3.20 – $4.26 USD) an hour to provide extra income for her family.

Prem Thomas is serving as a Kiva Fellow working with the new field partner Center for Community Transformation Credit Cooperative (CCT) in Manila, Philippines.

To view currently fundraising loans from CCT click here.

You can also join our new lending team here.

By Eva Wu, KF9 Philippines

Bizarre is probably not the best word to describe this client interview, but without a doubt we were intrigued and utterly fascinated by the alien-looking blob we saw sitting pretty before us. Corroi, HSPFI’s Kiva Coordinator and I found ourselves staring at a live (or semi-live) sea cucumber during a visit to HSPFI client and Kiva borrower Ann Lagrada on Camiguin Island.

(This is the second part of my “most memorable client interviews on Camiguin” series – check out “The Most Beautiful Client Interview (Part 1 of 2)” if you haven’t already!)

(If you have a soft spot in your heart, an ongoing and lasting fondness for sea cucumbers like the one above, and the thought of chopping/prepping a sea cucumber for consumption would cause you much undue stress, do NOT click on the “more” link.)

We peppered Ann with questions. I had eaten sea cucumbers before – it’s fairly common in Chinese cuisine – but I had never seen a live one before. Corroi hadn’t known before this that people actually eat sea cucumbers – so I tried my best to describe the slightly glutinous yet crunchy taste of sea cucumbers for her. A little bit like the seaweed dish that we had eaten earlier in the day.

Ann explained that her husband dives at night to catch the sea cucumbers. There are places in the Philippines where sea cucumbers are protected, she added, but there are currently no restrictions on harvesting sea cucumbers in Camiguin. After her husband returns with the catch, she’ll leave the sea cucumbers in small basins until they spew out any leftover sand and innards, then boil and dry them. Every two weeks Ann and her husband sells the dried sea cucumbers to a Filipino agent for $1,500 pesos/kilogram. She said that the agent will then export the dried product to Korea.

Ann estimates that she and her husband sells two kilograms of dried sea cucumbers to the agent every time they meet. At $6,000 pesos a month, this business is bringing in solid income for their family. Jan, the HSPFI project officer (or loan officer) who brought us here later told me that this business had successfully found a niche market and was one of the client businesses that he was most proud of.

Seeing our continued and somewhat lurid fascination for the sea cucumber, which had by this point of the interview ejected its innards, Ann asked for a knife and proceeded to saw the now completely dead sea cucumber in half. It had hardened much more than what I would’ve expected from its slimy exterior.

(Watch the below video at your own risk! Although I assume if you’ve gotten this far, this is probably what you’ve been waiting for…)

Ann’s husband had joined us towards the middle of the interview, presumably to find out why a foreign bumpkin interviewer was getting all excited over his sea cucumbers – joined in some of the answers and showed us his diving flashlight. We wrapped up with a few more questions and thanked them both. As we walked out to another interview, this time with Ann’s mother-in-law Perpetua Lagrada, Jan joked that Koreans liked to eat sea cucumbers because they’re believed to increase sexual drives. To which I laughed and replied, if that’s the case, sadly they haven’t worked on me at all!

Eva Wu is a proud member of KF9, and she’s still head over heels in love with the Philippines and her host MFI, Hagdan sa Pag-uswag Foundation, Inc.! Support HSPFI by lending or by joining the HSPFI lending team today!

By Kimia Raafat, KF9 Ecuador

Last week, I blogged about D-MIRO’s influence in the peri-urban zones of Guayaquil.  There is no way to describe the dedicated D-MIRO staff members and the lengths they go to reach those marginalized from the traditional financial system. So I opted to film a sample day! Here is “My Motorcycle Diary”:

Fun Facts about Ecuador:

1. Ecuador’s currency is the US dollar.  In 2000, Ecuador discontinued their 116-year-old currency (the sucre) in order to ”rein in runaway inflation, encourage investment and reverse capital flight”.  Many locals were unhappy about the switch.  The current president, Presidente Correa was a critic of dollarization, but he acknowledges that it would be more harmful to the economy to change back to the sucre. 
2. Until it rains in Cuenca, there are mandatory power outages in Ecuador!  Guayaquil (the city I am working in) currently has power outages everyday from 7 to 11 AM and from 1 pm to 4 pm (luckily D-MIRO has a generator!).  Each zone in the country has similarly scheduled power outages.  This will continue until it rains near Cuenca (a city 150 miles away from Guayaquil).  The dam near Cuenca (“Represa Hidroeléctrica Daniel Palacios”) is responsible for generating the majority of Ecuador’s hydroelectricity. 
3.  Fingerprint identification is preffered.  Many organizations (including D-MIRO) ask hourly employees to clock-in to work using their finger print (see minute 0:43 of video)
4. You never have to think  about what to wear to work.  Ecuador’s labor laws state that all businesses must have a uniform for their employees.  During the lunch hour, groups of co-workers dine together in coordinated business wear.  I have 3 of D-MIRO’s uniform polos!
5. Ecuadorians have major karoake skills.  Rather than coffee shops on every corner, there are karoake bars everywhere!   There are no stages, everyone remains seated at their table while the restaurant manager passes along the microphone. Karoake is an actual art form, the country is filled with potential “American Idol” talent.
6. Smile, you are on camera! The Guayaquil airport has an employee dedicated to filming every person entering the country from an international destination!  When departing Guayaquil’s “terminal terrestre”, the secure bus companies also have employees that walk around filming each passenger.

Kimia Raafat is a Kiva Fellow (KF9) at a new Kiva partner, D-MIRO  in Guayaquil, Ecuador.  If you would like to know more about D-MIRO please visit the Partner page or Lend!

By Rob Packer, KF9 Kyrgyzstan

As anyone who’s had a brush with Russian will tell you, going somewhere and using the Russian language to describe it is traumatic. It’s a nosy language I feel likes to keep tabs on me and wants to know all kinds of personal details like if I’m walking or running, driving or taking a plane, if I’ll be taking a rucksack or a trolley case, whether I come here often or don’t plan on coming back. I’ve been doing these mental acrobatics for the past month, and although the pleasures of the Russian language should carry a health warning, the more dubious pleasures of the Kyrgyz road really are open to everyone.

You don't know what it took to describe how we got here

I’m going to surprise my MFI colleagues when I say that Kyrgyzstan’s roads and its drivers really aren’t the worst I’ve seen. I’ve seen my friend Paolo overtake miles of traffic jams on Italy’s Amalfi coast by driving at oncoming traffic, I’ve sat in hours of jams in Mumbai and Mexico City, and I’ve been part of the problem riding a scooter in Indonesia. And I’ve learnt that looks can be deceptive, as when my parents’ relief at having a woman drive us to the airport in Guilin, China turned into white-knuckle fear, when we were overtaken by a bus and spent the next 50km avenging her lost honour. After this, whenever we’re sitting in a traffic jam in the rain in Bishkek and I see a Mercedes overtaking us on a grass verge, or we’re labouring along a potholed track in a 4×4 only to be overtaken by an old man in a Lada, I really know that I’m just back my favourite spot in the places where the road is an adventure, i.e. dangerous, and the distractions of the jaw dropping mountainous landscape along the Silk Road could all go badly wrong. And there’s actually something quite endearing about being driven along the road of Kyrgyzstan and passing Ladas with double beds or haystacks strapped to the top. Or wondering if the Russian flag flying upside-down outside the Gazprom petrol station is that way by accident on design. Less endearing is driving in the country at night, where the gentleman’s etiquette of how to deal with oncoming traffic that I’m used to, has become an updated version of the staple of the 19th-century Russian novel, the duel. Although I’ve yet to see anyone at my MFI do this, the rule seems to be that you dip your headlights as soon as you see your opponent coming and then give them a full beam in the face and point blank range. Part of me hopes that they cackle all the way to the other side of the mountains, but just as likely is that they’d be picked up by the sawn-off light sabres of the GAI, the ubiquitous traffic police found all across the CIS, who seem less interested by your real or imagined infringement and much more interested in the contents of your wallet.

This heading towards you in the night?

The people's car?

One of the most surreal parts of the roads in Kyrgyzstan is what’s driving on it: the roads are full of Mers, the local Russian term for a Mercedes Benz! When I first saw a Kiva borrower from Kyrgyzstan whose dream was to “buy a Mercedes”, it sounded like the pie-in-the-sky kind. Only once you’re in Kyrgyzstan and you see an Audi with a sticker saying KÄRNTEN (Carinthia, a state of Austria) or a Mers with a D bumper sticker (the international code for Germany), do you start to realize that this dream might actually be achievable. What was once a symbol of wealth and prestige, has become the “people’s car”, as my MFI colleagues pointed out to me on my first day. The original bodies mostly come from Germany or Austria and apparently are bought by middlemen in Lithuania, a nation currently more famous in my country for its builders and plumbers rather than mechanics, before being repaired and sold into the Kyrgyzstan market. And when a colleague came back from a conference in Europe, he was often surprised by how small the cars are there.

A Mers, the new people's car

Once again, the lesson I’m choosing to take from this is that looks really can be deceiving. I’ve not yet seen a Kiva borrower with a 15-year-old third-hand Mers, but I think the time will come. I’ve written in a few of my blogs on Kyrgyzstan that poverty looks different here from the standard Western conception. Does living in an apartment block with intermittent water and electricity (some “local colour” that also affects me) make you ineligible for a Kiva loan? Or does the fact that a borrower has a fridge mean that they’re “richer” and less deserving? I would say no, because apartments are a fact of life in Kyrgyzstan, or because we don’t know that saving for a fridge has meant saving for 10 years. And the concept behind microfinance is to reach people who don’t have access to any other source of funding.

I’ll leave you with some Flipcam footage of my most recent trip to Balykchy:

Rob Packer is a Kiva Fellow currently working with Mol Bulak Finance in Bishkek, Kyrgyzstan. Join the Kyrgyzstan lending team. There are borrowers from Kyrgyzstan with Mol Bulak Finance who you can help by contributing to a loan today, and many other entrepreneurs from around the world on the Kiva site.

By Victoria Kabak, KF9, Nicaragua

Before I left for my placement as a Kiva Fellow in Nicaragua, I was browsing my microfinance institution’s web site, trying to see what I could learn from it and to familiarize myself with the organization, AFODENIC, a bit more. I clicked on a link in the left sidebar called “Fuentes de Financiamiento,” or “Sources of Funding.” After the page loaded, I realized that, subconsciously and perhaps naïvely, I had been expecting to see a particular logo we know so well, that comforting, familiar green logo, with its leafy K and its curvy A.

Instead, the large pie graph on the page was labeled with the unfamiliar, non-green, non-leafy logos of three other funders. The smallest piece of that pie provides AFODENIC with funding equivalent to 4 times the amount of its monthly limit on Kiva–the largest, 57.5 times AFODENIC’s monthly limit.

There are a few important points to note at the outset. First, I can’t vouch for how recent these numbers are. Second, because the limits on Kiva are monthly, an MFI can receives up to 12 times that amount of funding in a given year. In fact, when I looked at the numbers on AFODENIC’s partner page on Kiva, the dollar amount of loans that AFODENIC has funded through Kiva is more than what the institution has received from two of the three other funders that were on this web page.  But in any case, Kiva wasn’t on the page and my first thought was, “I guess Kiva isn’t one of its biggest sources of funding.”

I was a little disappointed. I was days away from leaving for Nicaragua, jazzed to get there and still riled up from training. If Kiva didn’t make it on to the pie chart, did it mean that the funding from Kiva lenders wasn’t even registering as a drop in their proverbial ocean? Did that mean being a Kiva partner was making no difference to my MFI?

The answer is no. First of all, after being here for five weeks, I’ve learned that Kiva is a major source of funding for AFODENIC, despite what the web site might make it seem like. But I don’t need numbers, percentages, or dollar amounts to know that Kiva’s support makes a difference to AFODENIC.

Sometimes I sit in on the biweekly comités at the branch office down the street here in Managua. In these meetings, the loan officers present their clients’ applications for new loans and the branch manager approves them and decides how each is going to be funded. When I see how many loan applications are placed in the Kiva pile and I think about what would happen to those clients if AFODENIC wasn’t a Kiva partner, I know that Kiva makes a difference to AFODENIC.

When I visit a client for a journal update and try to explain to them what Kiva is and why I’m there , I usually show them a print-out of their borrower profile on the Kiva site. Many of them become so absorbed in the sheet with their photograph and the description of their loan that I have to wait several minutes before continuing on with my questions. When I watch these borrowers reactions to their own Kiva profiles, I know that Kiva makes a difference to AFODENIC and its clients.

Besides these very tangible experiences I’ve had that have taught me why truly Kiva matters to its field partners, a couple of features of Kiva’s model are also particularly impactful, in my opinion. Not having to pay interest on the funds they receive from Kiva and having the option not to cover losses when a borrower is delinquent or defaults both lessen the financial burdens the MFI has to bear. And funds saved this way are funds that can instead be diverted toward making more loans to clients and creating a financially sustainable organization.

And when it comes down to it, whether Kiva accounts for 30 percent of a field partner’s portfolio or for 1 percent, we’re absolutely working in a context where it’s true to say that every little bit counts. Whether or not Kiva gets any explicit credit on a website or a brochure doesn’t change the level of impact – impact that I see both in the office and out in the field – that Kiva is having in countries around the world.

Victoria Kabak is currently a Kiva Fellow in Nicaragua with field partner AFODENIC. To loan to an AFODENIC borrower on Kiva – because it does make a difference! – please go here.

I have been mistaken for this guy a lot since I've been here

By Adam Preston, KF9, Philippines

The Filipinos are a very generous people.  So generous, in fact, that if they don’t know your name, they will even give you a name – and that name is Joe.  I am greeted in this way no less than 3 or 4 times in a day, coming from men and women both young and old: “Hey Joe!”

As many guide books will tell you, in many parts of the Philippines foreigners especially males of Caucasian decent (read: white dudes) will be greeted as “Joe” referring to the GIs (American soldiers) who had a presence here through World War II.

“Finally, Filipinos have a unique greeting for male (and sometimes female) Westerners: ‘Hey Joe!’ (‘Hey Kano!’ is a less used variation). Both are hangovers from Word War II when the country was overrun by GI Joes or American soldiers (‘kano’ comes form Americano’) and are used ad nauseam.  Of course, if your name’s Joe, you’ll feel pretty special.  If not, you may start to feel like a clown set especially to give the locals a laugh.”

“Philippines”, Lonely Planet, p. 63, Edition 8, 2009

What is interesting about this experience isn’t just that this moniker dates back more than 50 years, but it is  how it is often said, the utter exuberance in which the greeting is delivered.  When waiting for my tricycle and I hear someone shout “Hey Joe!”, oddly, I don’t feel insulted.  When I look over at the guy saying this, he is looking right at me with a big smile on his face.   He seems to be genuinely glad to see me.  I politely turn and wave and reciprocate in the only way that I know how: “Hey buddy”, I respond.

Adam Preston is a Kiva Fellow working with ASKI in Cabanatuan City, Philippines. He answers to both the name his mother gave him and also now to Joe.  To get involved click here.

Alana Solimeo, KF9, Costa Rica

I realized after letting the excitement of Kiva, Costa Rica, and research topics (exhibited in previous post Rice, Beans and an Inspired Hypothesis) settle that I might want to take a step back.  The thing is I hit the ground running here, thanks to the great work of my predecessor Kiva Fellow, the fact that EDESA really is on top of their game, and the enthusiastic charge with which I like to begin things that earned me my nickname Eager Beaver.

As ready as I think I am to lay it down as to why I think EDESA’s model is so successful it will be prudent to spend a blog post proving that it is indeed, successful.  So here I give myself one shot to make you a believer, and then maybe we can jump on Kiva Fellow Suzy’s “What if microfinance really does work?” bandwagon!

While visiting SACRIN, the Community Credit Enterprise in San Cristobal Norte, Costa Rica, I got a chance to sit down for coffee and cake with two members of their board (who are also members/shareholders/borrowers), Luis Cordero and Olman Ceciliano Nuñez, who have served eight of its thirteen years of existence.  What did I learn?

1. Trust is reciprocal between the lender and borrower.  Borrowers trust the ECC because they are involved in its operations.  60 hours of technical training with FINCA Costa Rica go into just forming the ECC!  The relationship then benefits the loan recipients when the ECC can lend without traditional collateral requirements because of the trust and communal knowledge that exists in such relationships.
2. Borrowers understand paying interest because it comes back to them in dividends.  SACRIN has had returns over 80% for its members this year.  Jealous?
3. In 13 years, SACRIN has never seen a loan default.  There might be a few reasons  for this and they can each be attributed to the small neighborly populations served by Community Credit Enterprises.  First, SACRIN starts out providing small loans and only increases loan amounts according to increased debt capacity of members and success with their businesses.  Second, they have a real economic interest in seeing their clients succeed because they are members of the same community.  As such they are tolerant to work with borrowers on restructuring loan terms if something gets in the way of a borrower successfully completing loan terms as they were originally established.  Third, social collateral plays into repayment when the borrowers are interested in establishing themselves as credit worthy and responsible among peers, neighbors, and their own business partners and customers.
4. SACRIN began lending with a capital base established by selling one share of 5000 colones each, roughly $8.50 in today’s currency exchange rate, to 20 members.  They outgrew themselves and sought outside funding from the National Bank and EDESA and now they have a loan portfolio of 103,921,736 colones, or $180,420 which shows a little over 100,000% growth over 13 years.
5. SACRIN has seen its lenders/members/shareholders/neighbors/friends transform their businesses into lucrative enterprises selling goods on the wholesale market and providing services all over the country.  Having started out small, with say, one screen printing, sewing, or knitting machine, these business owners now have many machines, many employees, and strong efficient enterprises.  See recent journal updates for some of SACRIN’s borrowers:

Laura Segura Brenes

Mary Ceciliano Nuñez

Andres Vinicio Romero Romero

Jose Mauricio Padilla Romero

Luis and Olman spoke to me passionately about the history and future of SACRIN and its impressive financial performance and institution/borrower relationship.  They were tossing around numbers, percentages, converting them to dollars making it relevant.  They spoke of success metrics, Christian faith’s role in repayment, perceptions of poverty, but of all the various ways to measure a financial institution’s success, we ended the meeting focused on one:

“The most meaningful growth we’ve seen is personal growth.”

They explained to me that the people involved in the Community Credit Enterprise, including themselves, haven’t received more than a 6th grade education.  In that there’s an immeasurable component of this microfinance model.  These men and women are now part of a national network of financial institutions.  They attend international microfinance conferences.  They get together with peers and neighbors and make finance professionals out of one another.  They gather with the same group and make successful entrepreneurs out of themselves, and more impressive is how they reached out 13 years ago to form the ECC, to help themselves as individuals, with the financial risk and emotional burden that it might not work out.  But they believed it could and worked towards it together.

When 80% returns and 100% repayment rates pale in comparison to an unquantifiable personal growth they achieve while establishing themselves as ingenious members of the productive world…I’ll go ahead and call it a success.  Would you?

Check out the different ways the world applies microfinance by perusing the borrower profiles on Kiva.org and support EDESA by joining our lending team!

By Jane Lim, KF9 Mongolia

Today my envy of other Kiva fellows faded because I finally, finally got to meet Kiva borrowers.

There is a certain sadness that most of these borrowers have. For some it’s buried deep beneath stoicism and the victories of subsequent success, but for others it’s brimming at the surface, and you get the feeling that one more slight push would send them into the chasm. When I take their photos, they never smile – and I’ve thought of asking them to, but I don’t want to if there’s nothing to smile about. The truth is, life has been hard for them.

where i went today: the Chingeltey ger district

Kiva lenders may think they are doing a great thing (and they are doing a good thing of course), but these borrowers don’t get the benefit of the 0% interest rate, and to them, they aren’t being done any favors – because who knows what they had to get through to make those repayments back in full and on time, with interest added. They certainly don’t owe anyone anything, and because of that, when I intrude in their lives with a video and a huge camera, I feel somewhat ashamed.

But it’s not all grey of course. So many in the microfinance industry are in it because they hope, as do I. And the borrowers I meet, they do laugh, but don’t necessarily dream. The reality is that for many, loans are required for survival or working capital, not necessarily to step up or make a significant game-changing investment. Consequently, default rates in the microfinance world are lower than those in the mainstream commercial world, because these borrowers need to repay to get the next loan, and the next, and the next. And perhaps that’s why some of them are willing to go on video, get their photographs taken, answer questions… even though they might not necessarily want to – because they don’t want to risk losing their line of credit.

I realize this post sounds a bit morose, only because one particular borrower made such a strong impression on me. Soft-spoken, it isn’t in her nature to fight. But she has to, because she has two young sons to feed – a little red-faced baby was sleeping soundly on the single bed she has, and her other son, no more than 6, was watching a dubbed version of LOTR while doing homework. The downfall of socialism 20 years ago meant the closure of a lot of government-run factories, and she lost her job. So now she sits in her dimly lit ger, sewing grey gloves, hoping to find a mass buyer.

Hers is the sadness that threatens to overflow.

By Eva Wu, KF9 Philippines

I experienced a lot of firsts during my week in the field visiting HSPFI’s Camiguin Branch. Some good, some intense, all of it exciting. Amongst all these firsts, I’m convinced that I witnessed on Camiguin Island both the most beautiful and the most bizarre client interviews that I’ll get to conduct while here in the Philippines. This post is about the former – check out the latter at “The Most Bizarre Client Interview (Part 2 of 2)“!

A bit of background on Camiguin – I had been excited about this outing for quite a while, because all of my HSPFI co-workers kept telling me about this “island of paradise” that has hot and cold springs; a walkway through an old inactive volcano with stations of the cross that Filipinos from all over visit during Lent; the sweetest lanzones in the Philippines; a sunken cemetery.

Camiguin - A View of the Volcanoes

Corroi (HSPFI’s Kiva Coordinator) and I spent most of the week trekking around with the project officers and interviewing clients, so I’m keeping my fingers crossed that I can visit Camiguin again and spend more time touring some of the spots. Corroi and the Camiguin Branch staff were very thoughtful though in arranging the schedule – Wednesday turned out to be a work+fun day when we visited a bunch of HSPFI clients who ran souvenir shops, transport services, etc. at popular tourist spots. So we also got to check out some of the sights in between interviews.

At the sunken cemetery we found a HSPFI client who rows tourists over to the base of the massive cross marker. Corroi has an artist’s eye for picking out good backdrops for client interviews – she’s amazingly astute at this – and suggested that we do the interview in the boat while the client was rowing us over! So we did. It was a gorgeous day – bright sunlight, blue skies, aquamarine seas, and something undeniably romantic in the atmosphere – as there should be at this old cemetery, sunk beneath the waves because of a volcano eruption. We lingered beneath the giant cross and listened as the client told us about his business and his family. He runs multiple businesses to support his three children and their education while his wife is working overseas. The hardships that the client described contrasted with the beauty of the day and took my breath away.

After I came back to HSPFI’s head office in Cagayan de Oro I was disappointed to discover that this particular HSPFI client wasn’t posted on Kiva, so I can’t share the actual interview here despite building this entire post around how wonderful it was. Nonetheless, I’m grateful for the opportunity to meet this ambitious client and hear his story. He plans to purchase another boat so he can run more tours and catch more fish.

I’m proud to be working for an MFI that supports individuals like him, and I feel privileged to have found such grace on Camiguin Island. Standing beneath a memorial to the dead, I heard a living testimony to the strength of the human spirit.

Eva Wu is a proud member of KF9, and she’s still head over heels in love with the Philippines and her host MFI, Hagdan sa Pag-uswag Foundation, Inc.! Support HSPFI by lending or by joining the HSPFI lending team today!

By Josh Wilcox, KF9 Peru

Taking a brief recess from borrower profiles and repayment schedules at Kiva’s MFI pilot partner Caja Rural one weekend in Ica, Peru, I escaped to visit the small town of Huacachina, the “oasis of America”, located just a few miles outside the sandy metropolitan hub of Ica. Having become famous for its natural lake enclosed by sand dunes, the tiny city of about 115 people has become an immensely popular tourist destination not only for its aesthetic appearance but also the sandboarding and dune buggies.

For those unfamiliar, sandboarding is very similar to snowboarding except, yep you guessed it, it is performed on sand. First popularized in California in the 1980s, there are now annual Sandboarding World Championships held in Hirschau, Germany. Who knew???

As is the case with many natural phenomenon in Peru (e.g. the Nazca lines), there is a legend behind the picturesque beauty. It is said that a beautiful princess was once apprehended while bathing in a pond by a young hunter. She escaped and fled, leaving behind the pool of water she had been bathing in to become the lagoon. As she retreated across the desert, the folds of her mantle flowing behind her became the surrounding sand dunes. Rumor has it that she still lives down in the lagoon as a mermaid.

Unfortunately, while the lagoon has attracted significant tourist dollars, such economic growth does not come without its downfalls. The Ica province has a very arid climate and private landowners near the oasis began to install wells to access the groundwater. In order to compensate for the reduction in the water level and maintain the lagoon as an aesthetically pleasing tourist destination, the city began a process of pumping water into the oasis from a large water tank kept just outside the oasis. Also, with the influx of wealthy tourists from around the world, the city has experienced an increase in petty theft. Those perusing the dunes alone or at night are particularly vulnerable.

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Josh Wilcox is a Kiva Fellow at Caja Rural Señor de Luren in Ica, Peru as part of the KF9 class.

Please check out Caja Rural’s LOANS or LEND to other South American entrepreneurs and JOIN the Amigos de Caja Rural Señor de Luren lending team!

by Jed Goldstein, KF9, Uganda

After a 10 hr bus journey to Kihihi from Kampala on bumpy dirt roads, it was Aaron Coplands Rodeo ballet that began to play in my mind as I stepped off the bus and began to explore the town that lay before me. Kihihi is the modern Ugandan version of the wild American west that Copland so effectively captures in his compositions. As I explored a bit, I could not help but compare the roars of dirtbikes rolling down the muddy thoroughfare to the click-clock sound made by a horse’s hooves. The expansiveness of the terrain, combined with the rolling, lush hills and the breathtaking vistas, still unspoiled by mini-malls and super sized wal-marts, is really a sight to be seen.

Kihihi is a small town that lies about 500km Southwest of Kampala. For most of the 1990’s little commerce took place there because of various rebel movements that left the place terribly volatile and unstable. In recent years though, the rebel groups have laid down their arms and the town is now ripe for development. Kihihi has the good fortune of being located between two national parks here in Uganda, one of them featuring climbing lions and the other the majestic Rwenzori Mountain range; additionally its close proximity to the Congo means that the town has the potential to become a major center of trade in Southwestern Uganda. For this reason, Pearl Microfinance, has positioned itself with a branch office in the town to offer financial services to the expanding merchant population here.

Business trips are not simply for enjoyment though and while I was eager to explore  Kihihi, there was work that had to be done. I was given by the Kiva coordinator here at the main-office, Grace, a specific task to perform once I had arrived. My mission was to introduce the office employees in Kihihi to Kiva.org and explain the processes and procedures required to post a loan to the Kiva website. Essentially, what we are trying to do here at Pearl is decentralize our Kiva operations to the branch level. This in turn, will allow for a greater volume of postings on the website and potentially, if things go smoothly, Pearl’s monthly fundraising limit being increased.

So after a brief look around, I stumbled into Kihihi’s Pearl office and was offered warm greetings from all of the local staff members. Again, the “you are welcome’s” were plentiful. With sweaty palms, pretty much sweaty everything in fact, I began the presentation that I had prepared right away. I was a bit nervous about communication barriers—most people do speak English here, but at the same time it is not the first language of many— so I made every effort to speak slowly, clearly and not to over-complicate matters. Everything went quite well and throughout the presentation I could tell the loan officers were engaged because they kept on asking questions, a demonstration to me that they understood what was going on.

After the presentation was complete it was time for the final examination. I alerted the Kihihi staff that I was no longer Jed Goldstein as far as they were concerned, but rather would be playing the fictionalized role of Moses Mwami a local fish seller in town who is looking for a loan (I guess those college acting classes do come in handy sometimes). I then instructed them to ask me the questions found on Pearl’s Kiva questionnaire and to take my picture—all the tasks needed to post a profile on the Kiva website. They passed with flying colors, which meant that it was time for me to go back to Kampala.

The Kihihi team and I take some time to pose for a quick picture

After so much travel time to and from Kihihi on overloaded buses and dangerous dirt roads, I kissed the ground once I finally arrived back in Kampala and then curled into bed for much needed rest. Mission accomplished.