Posts tagged ‘loans’
There is a famous song that defines Salvadoreans as people that eat everything, enjoy everything and do everything. I have checked these lyrics are right. There is a word usually used for referring to Salvadoreans, this is “rebuscados”. If someone is “rebuscado” it means he does the impossible to achieve what he needs: paying back a loan, help a relative or feed his family. As they say, they can even sell rocks to find a way to survive.
Like many countries in the American continent, poverty affects great part of the population and a job is extremely difficult to find. This is why many people decide to be entrepreneurs, because the only opportunities they find are the ones they create.
But even if they want to start a small business it is extremely difficult to do it. Most of the people don´t have enough money to begin and they have no access to banks. These institutions normally require having a job, presenting an electricity bill, having properties to set as guarantees, etc and the majority of these humble people do not satisfy these requirements. And even if they do, the high interest rates they have to pay makes the business unprofitable. The other day one woman told me she had a one-year loan with a well-known bank and she had to pay back the same amount of interests and capital. Crazy.
One more thing Salvadorean entrepreneurs face are maras, or also known in the USA as gangs. It is the cancer of El Salvador. They are groups of young people (10 years to 30) that control the areas where they live. They oblige businesses to pay a rent, arguing that they will protect them from other people. If they don’t pay the amount, they can end badly.
There are several options:
1. Paying the rent.
2. Not paying, close the business and move to another area.
3.Not paying and continue with the business. If they do this, there will probably be a death in their family.
And this is real live in El Salvador. Yesterday we were visiting a client that had one of the most successful businesses in “Puerto del Triunfo”. Gangs required her to pay a rent that was higher than the amount of the loan she received few months ago. She paid what she could (the same amount as the loan,1000$) , but this was not enough for the gangs. Her son started to receive serious threats to kill him. She had no option. She closed the business and moved to a different area. Now she and her family hardly live with a small pupusas business.
Not easy the life they have and the risks they face. But despite all these difficulties, they continue fighting for their families and dreaming in a better future. Thanks to organisations like Fundación Campo, Padecomsm and Apoyo Integral that collaborate with Kiva, they receive those opportunities they were looking for.
These are loans that change lives.
By Peter Soley | KF19 | Bolivia
A chance encounter en route to Dakar, Senegal…
I have a strong tendency to read (ok fine, skim) blogs filled with photos. Aesthetically, it’s what I naturally gravitate toward, and I’m sure many readers out there likely do the same. Ironically, this post will defy this preference, as my camera has — unfortunately — found a new home.
It was important to remind myself when my camera went missing (as it is in so many other situations traveling or otherwise) that keeping an open mind and rolling with the punches is vital to staying sane. Had I not done so at the very start of my trip, I would certainly not have the following story, which I’m thrilled to share.
It didn’t start well, as I suppose encounters with strangers – especially on planes, in close quarters – often do not. I “accidentally” placed myself in the seat to the left (…aisle!) of the one assigned to me. But this arrangement didn’t last long, as the man who was in fact assigned to the seat I was occupying would quickly and abruptly (for the first time, mind you) correct my error. His method was not your standard gentle nudge, but rather an aggressive wave in my face of his ticket stub, backed up by two flight attendants urging me, “Please, ma’am, you must move.” Of course I did so immediately, and apologized profusely for my error. The dispute was settled cordially; we gave one another a very forced smile and I carried on with my reading.
The silence lasted about 15 minutes, until our plane began its ascent and the same man to my left pulled out a clearly SkyMall-purchased green blow-up tray table pillow. Admit it — you know what I’m talking about! It’s that outrageously oversized item in SkyMall Magazine that, when you’re flipping through the pages, catches your eye and forces you to pause for a few seconds to contemplate: “Seriously, who on earth would ever need or want this.” (Photo below if you’re not familiar.)
Well, I’d found my guy, and after 3 minutes of watching him work to inflate his pillow, I simply could not hold back my giggles. He of course noticed, and turned toward me with a glare of sorts. That’s when our conversation began…
Mo (short for Mamadou) was born and raised on the outskirts of Dakar, Senegal. When he was 13, his family moved to the United States for his father’s work, and he’s lived there more or less ever since. Mo lives and works in Washington D.C., and takes an annual pilgrimage home to Dakar to visit family. When Mo learned that I was Dakar-bound to work with Kiva, his enthusiasm for was effusive. Not only was Mo familiar with Kiva, he’s a lender himself! (I should clarify: Mo is a Kiva lender through his niece, who first joined and started an account for “their family”).
To me, this was fascinating — an absolutely perfect brain to pick. Not only was I meeting a Kiva lender (awesome…), but moreover I was meeting a Kiva lender who makes loans to individuals and groups from his home country. I was curious to learn more.
Mo explained, unprompted, how powerful organizations like Kiva are: “Kiva successfully illuminates the issues and lives of those in my country for people around the world.” He went on to describe his firm belief in the power of loans. They are, in his mind, a method through which “his people” can escape from a culture of dependency (aid, corruption, trade, debt, etc.), into independence and self-sufficiency while retaining their cultural identities. He also emphasized how fundamental this is to their personal empowerment.
I listened carefully, but was somewhat perplexed. I know that Kiva is subject to the same biases and attacks made by all microfinance critics. It couldn’t possibly be that EVERYONE feels the way Mo feels.
(My questions were incessant. I apologized several times for this, but Mo insisted I continue. If I hesitated to give him time to breathe, he’d probe me with: “So… what else??”)
I asked what his opinion is of those in or from his county who may feel differently, perhaps averse to Kiva or microfinance, particularly when its facilitated through foreign entities. He explained that of course there are individuals who disapprove of the idea of Kiva and other microfinance organizations. But, if they think the obstacles facing their country and communities are surmountable without outside help, maybe it’s instead the idea – their mindset — that needs righting.
Mo had a cool and perspicacious way about him. He was truly pleasant to talk to — the sort of person you can tell is addressing you directly, not looking astray at distractions nor seeking approval or agreement. His speech is soft and unhurried, and as he explained to me, his love for travel comes from chance interactions just like this one. Being both snarky and sarcastic, I pointed to his SkyMall pillow – still inflated — and told him he had “that” to thank.
By the time morning dawned, we were halfway through our 9 hour voyage across the Atlantic, and my eyelids were drooping. That’s when our Kiva conversation ended.
What started off as a seemingly dreadful beginning to my journey ended up being a most memorable encounter for me. Silly purchases aside, I could not have imagined a better person to meet as I embarked on this journey. I have no doubt that the upcoming months will be filled with peaks and plateaus, and at times (as forewarned at our Kiva fellowship training) “troughs of disillusionment.” My conversation with Mo, however, made me ever more hopeful that I find potential in micro-loans. At the very least, this interaction will undoubtedly make the inevitable frustrations ahead a bit more palatable.
*Mo: If you’re reading this fellows blog (as I learned you often do) — what a delightful turn of events it was meeting you, and my most sincere thanks for allowing me to share this story. I’m investing in my own green SkyMall tray table pillow immediately upon my return to the States!
Anna Forsberg (KF19) is a Kiva Fellow working with UIMCEC in Dakar, Senegal.
By Anya Raza | KF18 | Pakistan
My final Borrower Verification trip was to the village of Vehari, visiting Khursheed Bibi. We had attempted to meet her almost a week ago, but the morning of our appointment, her sister had unexpectedly passed away.
Leaving Lahore at 7 a.m., we encountered the first of our two hartals (demonstrations) of the day — tires ablaze, cars overturned and police nowhere in sight.
The protest was against the massive electricity cuts, with protestors chanting,“You have forgotten the villages, you have forsaken the villages” and claims of electricity being out for days at a time because officials forgot to turn ‘the switch’ back on. No wonder.
An oil tanker was parked dangerously close to the massive flame, with the driver nonchalantly sitting and watching the spectacle. The ‘highly inflammable’ sign on the tanker’s flank didn’t seem to faze him in the least. I requested our driver to make haste, lest we be caught in the blaze.
Meredith Pierce | KF18 | New Orleans
As I spend more time here in New Orleans — and as I get ready to depart — I have started to appreciate the daily sounds I take for granted. Just as important as the visual scenery, sounds can transport us to faraway locations.
In the past months, Kiva Fellows have shared video stories, insights on public transportation and accounts of our excursions into the field, but we’d like to invite you to experience our everyday lives through sound. Below are some clips that a few of us recorded in our various countries. Can you tell what they’re of or where they were recorded? Give us your best guess in the comments!
By Marc Raifman | KF18 | New York
When I first met the other Kiva fellows, I asked them where they would be working. I heard Kenya, Peru, Indonesia, and many more places I someday hope to visit. I listened and began to share their excitement, worries and curiosities.
Then they asked me where I would be working on microfinance.
“Um, New York.”
“Um, isn’t that where you’re from?”
Indeed it is. Unlike many of my more impressive colleagues, I came back to New York, with all the amenities to which I’m accustomed, to be a Kiva Fellow.
While I don’t have the opportunity to explore a different culture, I find myself on an exciting frontier of Kiva, an organization that is perpetually searching for inspired and practical solutions to financial problems. As my fellow fellows work to expand and strengthen Kiva around the world, I’m working on a pilot project known as Kiva Zip. The lending model we seek to create will facilitate direct peer-to-peer lending, continue expanding access to capital in the U.S. and abroad, and explore untested hypotheses about the nature of borrowing.
Oh, and did I mention that our loans are made at zero-interest?
The traditional Kiva model has already inspired a new understanding of the concept of lending. By connecting people around the country and around the world, Kiva has shown that small groups of individuals can play the role of banker for those whose success would not generate enough profit for larger banks to take an interest.
What Kiva accomplished for lenders, we now seek to accomplish for borrowers.
Since its creation in November, Kiva Zip has sought to prove that in the right context, small-scale borrowers can outperform the expectations placed upon them by traditional lending criteria. We do not believe that credit scores and cash flow projections are the only ways to predict success.
The context that matters here is the community. There is no doubt that one’s community affects his or her behavior. We believe that with the community, friends and family invested in the success of a business owner, no matter how small, their success and repayment rates will stabilize at a high level.
That is why at Zip we are testing due-diligence models that make use of community partners with an established relationship with the borrower. These community partners are known as trustees. We will encourage individuals to play multiple roles, as borrower, trustee, and lender, so the connections among them increase and their investment in one another’s success grows stronger.
We are seeking a broad spectrum of partners, including advocacy organizations, entrepreneurship classes, chambers of commerce, and religious institutions, as well as individuals who understand where there is need and opportunity.
Kiva Zip loans in the United States do not currently exceed $5,000, but as we provide this stepping stone to entrepreneurs in the States, as well as entrepreneurs in Kenya where Kiva Zip is also active, we will be searching for and finding solutions that will eventually contribute to more opportunity for all.
I encourage you, reader, to not just make a loan, but to think about where these ideas can create a positive impact in your communities, and let us know about it!
Marc Raifman is a Kiva Fellow, working in New York and Chicago this summer with Kiva Zip. If you would like to find out how you can get involved with this innovative program, you can reach him at Marc.Raifman@fellows.kiva.org. You can also find out how you can become a Kiva Fellow or find more information on Kiva and microfinance in general on kiva.org.
Diana Biggs | KF 18 | Burkina Faso
Last Friday, I had the opportunity to take part in «la Journée du Volontariat Français», an event at the French Institute of Ouagadougou which aims to promote the actions of French volunteers in Burkina Faso. As I commended my French colleague for the generosity of his fellow French citizens, he explained to me that although the best translation I seem to be able to find for «Volontariat » is «Volunteer », it is not the same as volunteers who actually work for free, for whom the term « bénévoles » is used (Hello, Kiva Fellows!).
Enter “la Journée du Volontariat Français”…
In its second iteration, the event attracted around 500 attendees: Authorities, volontariats, associations and NGOs. Despite its name, it wasn’t a day just for the French, but was also well attended by “Burkinabés” (the term for people from Burkina Faso) – and even one Canadian… (more…)
By Diana Biggs | KF18 | Burkina Faso
One week ago today, I touched down in my new home of Ouagadougou, Burkina Faso. The greetings of “Bonne Arrivée!” I received at the airport are now echoed each morning as I arrive at my field partner’s office and each evening as I return home and am greeted by my night guardian, Adama.
By Anya Raza | KF18 | Pakistan
Amid awkward applause upon our arrival to Pakistan, I abandon the safety of the aircraft thick with the aroma of curry to be welcomed into a city veiled by yet another blackout.
Despite my 2 a.m. arrival, I’m received with big smiles and a plate full of mouth-watering nihari, a local breakfast delicacy.
Pakistan, a country known for its blatant contradictions — political and cultural — is an exciting place to arrive as a Kiva Fellow.
Within just a few hours, the Pakistani public is taking to the streets, protesting the daily 18 hour power outages. Simultaneously, politicians debate in the permanently air-conditioned parliament whether a controversial ex-minister, also known as Raja Rental, should join the current president, Mr. Ten Percent, as the new Prime Minister.
Meanwhile, a Kiva Fellow moves into the heart of Pakistan, Lahore.
Clara Vreeken, KF 14, Bolivia
Clara volunteers as Kiva Fellow in Bolivia. She works for the micro finance institutions IMPRO, Pro Mujer and Emprender. She visited a lot of borrowers, of whom many women.
Francisca has to fight hard taking care for her large family and has a heart of gold by inviting me at her home. Rosa was beaten by her ex husband and became stronger by having her own shoe business. Not only women have hard times surviving in Bolivia, also men suffer. Read the story of Carlos the taxi driver who almost died. And what happens with women who do not show up on repayment meetings?
Clara Vreeken, KF 14, Bolivia
Clara volunteers as Kiva Fellow in Bolivia. She works for three micro finance institutions. She verifies borrowers’ data, implements changes and informs the lenders about Kiva’s entrepreneurs. In this blog she elaborates on her tasks as a Kiva Fellow.
Bolivian Kiva borrowers: buying a cow, selling food, acquiring sewing machines and constructing rooms
In this second blog of Clara Vreeken, you can meet the Bolivian borrowers of Kiva’s field partner IMPRO: Pascuala and Santos buying a good-quality dairy cow, Maria selling food and renting small accommodations, Juan Carlos and Mery buying more sewing machines and Mery’s mother Maria constructing rooms. 43% of IMPRO’s clients live from 1 dollar or less per day. IMPRO serves clients in rural areas (11%) and in two big cities (89%). 45% of IMPRO’s 2147 clients are women.
By Alexis Ditkowsky, KF14, South Africa
You may or may not have noticed that posts from South Africa have been on the non-specific end of the spectrum. This is because Kiva’s first partner in South Africa, Women’s Development Businesses (WDB), is currently in a “pilot” stage. Both Kiva and WDB are figuring out the best processes and procedures for working together so that WDB can keep doing what it does best and Kiva and Kiva’s users can have the reporting they crave.
If you were eagerly awaiting lots of info from South Africa, this is the post for you! And if you just want to see happy pictures of loan officers and clients, all you have to do is scroll to the bottom of the page.
by EB Moore, KF13 South Africa
Please join me in welcoming Women’s Development Businesses as Kiva’s newest field partner. Not only is WDB bringing its borrowers to the Kiva community, but it is also allowing Kiva lenders to connect with borrowers in a previously untapped country – that’s right, as of this week Kiva lenders will be able to connect with borrowers in South Africa!
A day in the life of a loan officer in Cotonou, Benin.
By Nick Whalley, KF12, Philippines
As I noted in an earlier blog, the bulk of the Center for Community Transformation’s loans are made to small variety store owners for inventory restocking. While this capital is necessary to sustain these businesses, and at times allows owners to diversify their offerings, it is clear there are few opportunities for growth. Competition is rampant, and demand local and limited.
It was inspiring then to meet a “round rag” maker in Manila who had developed partnerships with two companies interested in purchasing her rags. The companies needed thousands, and the borrower was having difficulty satisfying the new orders. A single employee working with a single sewing machine was simply insufficient. The production process is quite simple: scrap fabric from a local t-shirt factory is sewn into two sunflower shaped pieces six inches in diameter. Smaller pieces of colorful fabric are placed in the middle of one of the sunflowers and the other is sewn on top creating a thick, ravioli-like rag (see below). The borrower mentioned she had spent the last week looking for an affordable new sewing machine (she would purchase it with a CCT loan) to help her expand production. She also intended to hire an additional employee.
By Taylor Akin, KF9, Togo
Sleep-deprived and over-heated, I sat in front of the fan in the loan officers’ room. I had been waiting for a loan officer at the WAGES branch office in Hédzranawoé for over an hour and sat unmoving as the room buzzed with activity all around me. Loan officers ran in and out, clients sat down and stood up, phones rang and calls were made, passbooks opened and closed, pencils scratched paper, sweat stained foreheads. I looked at the loan officer sitting across the desk opposite me. Adam is one of the kindest people I have met since my time here at WAGES, and I have had the opportunity to visit clients with him on several occasions. He is gentle, quiet, smiles easily and works extremely hard. I watched him flip through papers and carefully write the names of clients on a yellow post-it. With every name, he would “tsk tsk,” exclaim a high-pitched “ah” sound of frustration, and shake his head.
Dear Kiva Lender,
A few weeks ago, I created a video introduction to what you might experience if you followed the money you lent on Kiva to Vietnam. This time, meet the local staff and credit officers of the local micro-finance institution who make the magic happen. You’ll hear of a credit officer’s story of the impact that micro-credit has had on her family directly. Hope you enjoy!