Posts tagged ‘Costa Rica’

Village Banks BY Farmers FOR Farmers: A Microcredit Labor of Love

Oxen hauling coffee harvests in La Sierra, Platanares, Costa Rica.

 By Julie Kerr, KF16, Costa Rica 
Part 2:  Microfinance Models in Costa Rica – Featuring FUDECOSUR
(See Part 1 for details on how FUDECOSUR’s village banking model works)

The warm red earth pulls me in, as I follow FUDECOSUR loan officers on their labor of love.

Serpentine paths lead us through farm lands carved out of dense swaths of jungle, as borrowers take us to the plots of land they proudly cultivate, thanks to the help of Kiva lenders.

As I slip and surf along steep paths slick and thick with monsoon rain, sprawling ferns the size of a family hut, reach out to us, with unfurled leaves heavy with the same mist that envelopes us.

Majestic white oxen haul mighty harvests out of the valley depths, where machines dare not tread, due to thick, quicksand clay mud, which all too lovingly pulls all things passing, toward the womb of the world. We move to the side of the path, making way for the heaving beasts of burden, as they pull weighty sacks of coffee beans and other food crops, in brightly painted “carretas” (wooden carts with wooden wheels).

Continuing along our trek, we descend into a warm, moist Eden of lush green, where water-collecting trees grow taller and stronger as we approach the river.

“Welcome to La Sierra! Here we take care of nature!” – Village welcome sign in La Sierra, Platanares, Costa Rica.

Unlike farms I’m used to seeing in the United States, Costa Rican farms boast fields of crops coexisting with an abundance of medicinal plants and native trees, which are protected by law.

True to Costa Rica’s conservationist spirit, owning land means that one is charged with protecting existing plant species essential to long term survival, while cultivating crops essential to immediate survival.

Cutting down old-growth, or endangered trees, or trees which sprout, stretch and rise along rivers, is strictly punished by hefty fines and jail time. These rules apply even if one destroys any such tree on land one owns.

The result?  Farming in Costa Rica is no longer synonymous with deforestation. Because of the great care that has been taken to preserve the environment, Costa Rica has become a Mecca for biologists and laymen lovers of wildlife. The nation boasts the largest percentage of protected land in the world (25%, compared to the developing world average of 13%, and the developed world average of 8%). While making up only 0.25% of the earth’s land mass, Costa Rica is home to 5% of the world’s biodiversity. And though such animals are nearly extinct in neighboring countries, large jungle cats, a variety of monkeys, reptiles and amphibians, and an abundance of bird species and marine turtles, survive and thrive in the ecologically rich coast that is Costa Rica.

Oxen hauling farmer and son to coffee fields - La Sierra, Platanares, Costa Rica.

Protected land swells and wells with sweet, crystalline springs, rolling rivers, tumbling white waterfalls, lakes, mangrove swamps and marine estuaries brimming with life.

Due to a deep respect for the earth, exceptionally clean water and fresh air blanket the country, and are a great source of pride for Costa Ricans.

Those who work the land are especially proud of it, and in the eyes and smiles of Kiva borrowers and FUDECOSUR loan officers, beams a joy and passion that comes from living a labor of love.

In The Fields:  Loan Officers Serving as Agricultural Development Partners

Not only are FUDECOSUR  village banks run by village farmers, as detailed in Bank-O-Mat Under a Hot Tin Roof, but they are also trained and managed by loan officers who are farmers themselves.

As FUDECOSUR  seeks to assist and develop agricultural communities by becoming an integral part of each community, FUDECOSUR’s loan officers provide much more than a mere financial services relationship. Since loan officers Geiner Gonzáles Marín, Gerardo Barrantes and Danny Zuñiga all come from farms themselves, they also serve as valued partners, advisors and mentors, not only from a bank operations training and guidance perspective, but also with regards to helping clients optimize crop and livestock output.

Geiner Gonzáles Marín: Chief Loan Officer

Geiner Gonzáles Marín entering a coffee farm in La Sierra, Platanares, Costa Rica.

When visiting borrowers and the lands they cultivate, Chief Loan Officer Geiner Gonzáles Marín, often leads the trek into plunging valleys or up steep mountains, with unceasing enthusiasm.

Born and bred on a coffee plantation with dairy cows and various food crops, Geiner is in his element and is unstoppable –copious rain or shine.

With an absolute passion for the land and the fruits of farmers’ labor, his camera is always in hand, snapping photos of crops grown with Kiva loans. He also interviews the farmers with great interest, inquiring about crop cultivation challenges (such as destructive wilting or fungus caused by excessive rain), and offers vital suggestions on how to combat various crop infirmities and increase crop yields.

Gerardo Barrantes: Loan Officer 2

Gerardo Barrantes with the largest of his giant Ayote harvest, measuring 67cm long, and weighing 17 kilos – San Rafael Norte, Costa Rica

Sharing the same intense passion for the land, loan officer Gerardo Barrantes shows off photos of gigantic yucca and ayote crops he’s produced organically. Clients are wowed by the 37-pound mega-vegetable Gerardo proudly cradles like a newborn child.

While eagerly inspecting and praising crops produced by Kiva borrowers, he offers guidance on stronger, more rain-resistant produce likely to benefit from organic farming methods.

Gerardo’s love of the land is also reflected in his paintings. One features his childhood home – an evergreen dairy farm, fed by fresh spring water, cascading from the mountains shadowing his boyhood village. Gerardo’s artisan talents are also used to turn “carretas” (ox-drawn wooden carts) into rolling works of art, for the proud farmers in and around his village.

Danny Zuñiga: Loan Officer 3

Danny Zuñiga (far right) with his proud parents in the family sugar cane fields - Pilar, Costa Rica.

Like his counterparts, loan officer Danny Zuñiga has always had a deep desire to remain close to the land, and the people who tend it.

As a small child, Danny’s mom jokes that it was hard to get him excited about school, since he preferred spending time with dad in the family sugar cane fields.

True to his passion, Danny enrolled in an agriculture-based vocational school program. From grades 7-12, Danny bussed his way to Colegio Tecnico Profesional de Platanares, which has a working coffee farm, and livestock farm full of cows, pastures, pigs and rabbits. Just like his colleagues, Danny’s favorite part of the job is being out of the main office, and in the field with borrowers. As such, Danny is especially proud to help serve client needs with his agronomy training, both in theory and in practice.

In addition to informal cultivation guidance provided by loan officers, FUDECOSUR borrowers also benefit from community and business development courses funded by FUDECOSUR profits.  Free technical training and education are provided to increase crop and cattle yields, improve community health and sanitation, and expand alternative job opportunities. Course themes are requested by the Village Banks, and are coordinated by the FUDECOSUR director and loan officers – who source experts in each field of training (such as technical college agronomists for crop cultivation or livestock care courses, or information technology instructors for computer training courses). Village bank communities in need have benefitted from detailed courses combining theory and practice, such as:

  • Livestock Health Care and Output Optimization
  • Coffee Cultivation and Output Optimization
  • Hydroponic Farming Capacitation (to optimize more environmentally-friendly, and disease-free farming)
  • Food Handling and Sanitation (to improve community health and support start-up food service businesses)
  • Computer Training (MS Office for children and adults)
  • Sewing/Clothes Making
  • Community Recycling
  • Water Purification

FUDECOSUR provides these free courses not only as a form of long term community development, but also believes that such courses are responsible for client loyalty and very low default rates (2% reported for 2010). The more involved FUDECOSUR is in the village bank communities, the greater affinity clients feel for FUDECOSUR as a member of their community, and the more willing and able clients are to repay loans (per FUDECOSUR’s philosophy).

Furthermore, borrowers who are taught methods to improve production, make stronger clients and business partners in the future, since they’ll eventually have more income resources.

In The Village Banks:  Loan Officers Serving as Financial Operations Partners

Working “carreta” painted by FUDECOSUR Loan Officer Gerardo Barrantes.

Beyond working to provide agricultural communities with formal and informal business development guidance, FUDECOSUR loan officers also train farmers to run village banks, which operate in the communities where farmers reside.

With dedicated mentoring and guidance from loan officers, FUDECOSUR’s Village Banks (also known as Credit Committees) are run by 5-7 dedicated volunteers, who are elected every 2 years by members of their community.  Partnering with FUDECOSUR’s loan officers, Credit Committees are responsible for assessing and approving loan requests, disbursing loans to borrowers, collecting loan payments, documenting all credit requests and exchanges, and monitoring borrower progress. Credit Committees are also charged with educating their community members on FUDECOSUR rules and requirements for soliciting, receiving and repaying loans.

Geiner Gonzáles Marín (right) inspecting and gathering coffee beans for Kiva borrower Rigoberto Garro Godinez - La Sierra, Platanares.

Given their intimate knowledge of the land, FUDECOSUR  loan officers are deeply respected and revered by clients as fellow farmers, who bring much-needed credit funds and education to underserved communities.

“Geiner is one of US!”  Village bank members of Cedral de Cajón exclaim (referring to the Chief Loan Officer).

Since agricultural communities are commonly excluded from traditional financial services, the introduction of FUDECOSUR funds and training has given clients a renewed sense of hope, pride, and excitement.

Many FUDECOSUR clients recant tales of suffering through intimidating, confusing and lengthy application processes for traditional bank loans.

After losing money to travel costs, and crops left unattended for multiple visits to national banks, farmers are often left disheartened by rejection at the end of the process.

After struggling unsuccessfully for years to obtain national bank loans to support his farm, Antonio Vargas Hernandez, is now Vice President of FUDECOSUR’s village bank in Cedral de Cajón.

“After being rejected for loans with national banks time after time, I never imagined I’d actually be running a bank!” Antonio is radiant with warm pride and enthusiasm. “I’m so proud to be able to help my community move forward with affordable loans that can be obtained right here!”

Geiner Gonzáles Marín descending into the valley of La Sierra, Platanares to reach a Kiva borrower’s coffee farm.

The complexity of the national bank loan process, plus the constant rejection of farmer applications, made many farmers feel inadequate and incompetent when seeking credit.  In contrast, FUDECOSUR has taught clients that they are not only valued borrowers – they are also essential, competent and capable financial services partners.

As farmers with intimate knowledge of the land, and personal experience with members of their community, Credit Committees are well-suited to decide which business proposals are most apt to thrive from a micro-loan.  If an unprofitable business proposal is presented (such as planting crops in areas not conducive to successful crop production), the hands-on farming expertise of Credit Committees is leveraged, to help prospective borrowers come up with alternative proposals, which will generate positive growth, and help borrowers thrive.

Because of FUDECOSUR’s inclusive village banking model, farmers who formerly perceived themselves as financially illiterate, have become highly functional village bank operators who now beam with confidence.

“Loan officers like Geiner make us better people” says Arrelio Arías Brellas – President of FUDECOSUR’s village bank in Cedral de Cajón.  They’ve made credit processes easy to understand, and loans fast and easy to obtain. Because of their time and dedication, we are now equipped to help our community improve their businesses, and make life easier.”

Miguel Mora Vargas, Treasurer of Cedral de Cajon’s village bank, explains how loan officers lead by example, and are a great source of inspiration for village bank officers, who are also borrowers themselves.

“Geiner’s hard work makes us want to work harder every day to help our community succeed. Loan officers like Geiner are always punctual, and they stay after hours to ensure all credit exchange tasks are understood and complete. Their knowledge and expertise becomes our knowledge and expertise, and we learn more every day. Our community is stronger because of FUDECOSUR.”

Thumbs-up and smiles from a proud coffee farmer - La Sierra, Platanares, Costa Rica.

As village bank operators express their gratitude for FUDECOSUR’s inclusive and educational community development model, monsoon rains often thunder down outside, making a mighty rap-a-tap-tap chorus of sound, which mimics roaring applause.

Cedral de Cajón is just one of many communities expressing deep thanks for FUDECOSUR credit services, and the Kiva loans that help make them possible.

Time and again, I have the pleasure of seeing borrower hardships converted into eventual successes through Kiva loans, and I redefine the concept of wealth every time.

Most FUDECOSUR borrowers, due to their isolated location, have never had a relationship with a national bank, and therefore, don’t even have savings accounts. They are subsistence farmers who don’t become financially rich with Kiva loans, but who are able to maintain crops and cattle for more consistent production, or grow their businesses when weather and market conditions are optimal.

With each new loan received (after years of exclusion from traditional financial services), FUDECOSUR borrowers feel that their work is valued and more important than ever. With each successful harvest supported by Kiva loans, farmers stand taller. Single mothers raising pigs which give birth to litters of 6, or chickens producing piles of healthy eggs, radiate with a newfound belief in themselves as capable and successful providers for their children. Sons producing more abundant coffee beans or corn with nutrient-rich fertilizers, beam with pride, as they are able to care for aging parents, and feel confident about supporting a future family of their own.

What price tag can you place on the renewed sense of life, optimism, enthusiasm and excitement that comes from feeling valued, confident, competent, capable and hopeful?

The value, in my humble opinion, is priceless.

And though life is not easy for these hardworking borrowers, they are growing wealthy in many ways human beings should be, thanks very much in part, to generous Kiva lenders.

Past Blogs:

Upcoming Blogs:

  • Kiva Borrower Stories and Thanks from The Field
  • Jungle Journals – Adventures in the Wilds of Región Brunca

How YOU Can Help:

  • Lend to a Kiva entrepreneur today!
  • Apply for the Kiva Fellows Program!
  • Join the FUDECOSUR lending team!

Julie Kerr is Kiva Fellow serving in San Isidro, Costa Rica. She currently supports FUDECOSUR (Foundation for the Development of Southern Communities).  FUDECOSUR is a non-profit microcredit provider, dedicated to empowering Southern Costa Rica’s disenfranchised agricultural sector.

18 November 2011 at 12:06 4 comments

Bank-O-Mat Under a Hot Tin Roof: Making Non-Profit Microfinance Sustainable

One of FUDECOSUR’s 45 Village Banks - Pueblo Nuevo, Región Brunca, Costa Rica

By Julie Kerr, KF16, Costa Rica
Part 1:  Microfinance Models in Costa Rica – Featuring FUDECOSUR
(Check out Part 2 for more adventures in FUDECSOUR village banking)

Bump-duh-duh-thump-thump, Bump-duh-duh-thump-thump, Bump-duh-duh-thump-thump WHUMP!!!

So goes the rockin’ and rollin’ commute to remote villages along dirt roads – speckled with basketball-sized boulders, and craters large enough to swallow a small man (that’s where the “WHUMP!” comes in).

Maneuvering these roads with a grin and gusto are FUDECOSUR’s dedicated loan officers:  Geiner Gonzáles Marín, Gerardo Barrantes and Danny Zuñiga. Our destination for each turbulent trip is one of FUDECOSUR’s 45 village banks – which provide the only source of much-needed credit most clients have ever had.  THANK YOU to all Kiva lenders who help make this possible!

As we zig-zag along winding roads trying to avoid the mammoth “WHUMPS!”, we run into traffic. Blocking our path is a fearless bull unspooked by our roaring engine. He stares us down as if to say: “This is my road, buddy, and I refuse to moooooove”.  As we inch forward, gently nudging his bum with the bumper, he finally decides to amble on.  Then our ascent is blocked by a bulldozer shoveling landslide debris off of the road.

While we wait, I savor the warm sounds of humming insects, and whispering laughter from palm leaves rustling in the wind. I take in the views of lush, green valleys and farmland terraced along the hills and rising mountains.  Coexisting with carefully planned crops of fire red coffee beans, sugar cane, corn, and legumes, are patches of wild, unclaimed land full of sweet lemon trees (yes – the lemons here are sweet), bright fuchsia bananas (which are mostly eaten by the birds) and miniature yellow bananas (which humans find sweet and delicious). Wild avocado and coconut trees can also be found, and like the sweet lemons and baby bananas, they are free to those who wish to indulge. Have I landed in Heaven??

Our vehicle lunges forward, and I’m whisked out of my glassy-eyed daydream of staying here forever. We pass pristine waterfalls tumbling down the mountain, across the road, and down into whitewater rivers which snake through the valley below.  Aaah… slipping back into my daydream again… I’ve grown so accustomed to the rhythm of the roads that the “Bump-duh-duh-thump-thump” now serves as my lullaby.

WHUMP!  We arrive at the village bank.

Perched on a verdant plot of land amidst pastures of feeding cattle, or rising food crops stretching  toward the sun, are many of FUDECOSUR’s village banks. Some village banks are simple one-room structures with a burning tin roof shading us from the elements.  Other village banks operate out of a farmhouse kitchen or living room.  All village banks are a part of FUDECOSUR’s mission to bring financial support to the doorsteps of disenfranchised populations.

Due to the isolated nature of the farming communities we visit, most residents have never had a savings account. The absence of national banks in these remote areas has excluded much of the agricultural sector from financial savings and borrowing opportunities.  In order to qualify for a loan, national banks often require costly cash deposits – which most farmers can’t pay, since they rarely have savings accounts. Without access to savings accounts, farmers often purchase a pig or a cow with remaining cash.  These animals serve as the farmers’ insurance plan, and are sold when large sums of money are needed for emergencies (such as unexpected medical expenses).  While farmers are able to subsist without access to credit, it is extremely difficult, at best, to increase living standards or to recover from natural disasters (such as floods or blight) or major health emergencies.

Filling this vast credit void is FUDECOSUR  (Foundation for the Development of Southern Communities)  –  A non-profit microcredit provider, dedicated to empowering Southern Costa Rica’s agricultural sector.

Besides providing loans for expansion of crops and livestock, FUDECOSUR also provides Family Well-Being loans, which cover medical, educational and home renovation expenses.  Such loan diversification ensures that struggling farmers are not forced to sacrifice one essential need (such as money to purchase seed and fertilizer) for another (such as money to pay for life-saving medical treatment).

To facilitate easy repayment based on agricultural development and sales cycles, FUDECOSUR offers loan terms of up to 3 years, with annual rather than monthly principal repayment terms. Loan terms are also restructured to help borrowers overcome crop and cattle losses from natural disasters (such as floods and blight), and financial losses due to health emergencies.

To ensure credit services are easily accessible, affordable and sustainable, FUDECOSUR literally brings banks to remote villages in need. Leveraging dedicated volunteer networks, existing social infrastructure and building facilities, FUDECOSUR maintains low operational and servicing costs, and minimal environmental impact, while building community cohesion, and opportunities for community members to thrive.

How The Village Banks Operate:  Volunteer Power!

Village Bank operations in action: Santa Elena, Región Brunca, Costa Rica. Tables to the left serve clients repaying interest, while tables to the right serve clients soliciting or receiving money for new loans.

FUDECOSUR’s Village Banks (also known as Credit Committees) are run by 5-7 dedicated volunteers, who are elected every 2 years by members of their community.  Partnering with FUDECOSUR’s loan officers, Credit Committees are responsible for disbursing loans to borrowers and collecting loan payments.

As farmers with intimate knowledge of the land, and personal experience with members of their community, Credit Committees are also charged with deciding which business proposals are most apt to thrive from a micro-loan.  If an unprofitable business proposal is presented (such as planting crops in areas not conducive to successful crop production), the hands-on farming expertise of Credit Committees is leveraged, to help prospective borrowers come up with alternative proposals, which will generate positive growth, and help borrowers thrive.

Where The Village Banks Operate:  Mi Casa Es Tu Casa!

Village Bank in Cedral de Cajón, Región Brunca, Costa Rica

To ensure zero resources are spent on office construction, rent or maintenance, Village Banks operate out of existing community structures, such as a tin-roofed central market shelter, or the homes of Village Bank (Credit Committee) members.

And, since Village Banks operate in villages where borrowers reside, clients avoid costly money and time expenditures, required for travel to distant towns or cities (where national banks reside).  In short, the proximity of the village banks to clients ensures unprecedentedly easy and consistent access to credit services.

When The Village Banks Operate:  After The Cows Come Home!

Kiva borrower traversing the farmland he works: Administración, Región Brunca, Costa Rica

To accommodate the demanding work schedules of agricultural borrowers, Village Banks meet every 2 weeks, on recurring set dates (i.e.: every first and third Tuesday of each month). Bank meeting times start in the late afternoon (2pm, 3pm or 4pm) to allow borrowers to meet essential crop cultivation and livestock care demands. As such, borrowers are able to access credit services without sacrificing critical production tasks and wages.

At each meeting, debt principal and interest payments for existing loans are collected, while money for new loans is solicited and disbursed.

Homeward Bound:

Road to Cedral de Cajón, Región Brunca, Costa Rica

After the 3-4 hour bank meeting ends, we bid warm farewells, with new loan profiles and hopes for better futures in hand (thanks to the generosity of Kiva lenders).

By the time the loan officer and I reach home (FUDECOSUR headquarters in San Isidro), a 10-13 hour day will have passed.

Once I reach my cozy, tin-roofed apartment, echoes of “Bump-duh-duh-thump-thump WHUMP!!!” serenades will lull me to sleep, and ring out again at the start of my next adventure.

Other Blogs:

Upcoming Blogs:

  •  Jungle Journals – Adventures in the Wilds of Región Brunca
  •  More Than Microfinance – FUDECOSUR’s Free Community Development Courses

How YOU Can Help:

  • Lend to a Kiva entrepreneur today!
  • Apply for the Kiva Fellows Program!
  • Join the FUDECOSUR lending team!

Julie Kerr is Kiva Fellow serving in San Isidro, Costa Rica. She currently supports FUDECOSUR  (Foundation for the Development of Southern Communities). FUDECOSUR is a non-profit microcredit provider, dedicated to empowering Southern Costa Rica’s disenfranchised agricultural sector.

6 October 2011 at 16:45 6 comments

An Innovative Approach to Microcredit in Costa Rica

John Murphy – KF12 – EDESA – Costa Rica

Having completed my fellowship at EDESA Costa Rica, I’d like to share with you an explanatory video of the MFI and its lending methodology. Enjoy.

Continue Reading 9 December 2010 at 12:37 1 comment

Taking Action: When Thanksgiving isn’t enough

Costa Rican women can give thanks for many things:

Educationally, they have comparative literacy and enrollment rates as their male counterparts. Economically, they are doing exponentially better than their Central American neighbors, such as Nicaragua. Politically, they are represented by the country’s first female president, Laura Chinchilla. Legally, they are protected by a pro-woman legislature and institutions such as the INAMU, or National Institution of the Woman. Socially, however, there is ground to be covered.

Continue Reading 25 November 2010 at 15:00

Peace, Love, and Platanos – video recap of a recent visit to three ECCs

By John Murphy, KF12, Costa Rica

Video – This past weekend Steven, Gerardo, and I made our way to Talamanca, indigenous territory in Costa Rica’s Southern Zone. There we met with three up-and-coming ECCs set up with the help of Peace Corps volunteer Chase Adam.

Continue Reading 8 September 2010 at 07:00 7 comments

Costa Rica…in ten seconds

By John Murphy, KF12, Costa Rica

*Weekend edition* – Costa Rica in ten seconds

Continue Reading 27 August 2010 at 21:03 9 comments

Planting Trees with Schoolchildren – Social Responsibility in Microfinance

By John Murphy, KF12, Costa Rica

*Update: additional video just added – interview with the ECC’s vice president Vicky.

Social responsibility means taking care of the “triple bottom line” – people, planet, profit. Check in for pictures and a video about one Communal Credit Company’s social responsibility efforts.

Continue Reading 18 August 2010 at 06:30 4 comments

“They are lined up around the block”

By John Murphy, KF12, Costa Rica

Great things are happening here at EDESA in San José, Costa Rica. A quick rundown of what EDESA does and how that ties back to Kiva and lenders like you.

Continue Reading 5 August 2010 at 14:50 10 comments

The Many Faces of Microfinance

By Meg Gray, KF10 Costa Rica

One of the benefits of being a Kiva Fellow for more than one placement is getting to see how different MFI’s (microfinance institutions) with very different models all fit under the microfinance umbrella. There is no one-size-fits-all methodology. I just finished up my second full placement as a Kiva Fellow and along the way I also visited a third MFI for a week. For those of you just getting started with microfinance or for those who are interested in seeing the diversity amongst Kiva’s partner’s, I thought a brief rundown of a few MFI models side by side might be interesting. So here I go (ordered chronologically)

Model #1 CEPRODEL (Managua, Nicaragua)– Individual Loans only

One of CEPRODEL's branch office is inside a stall in a main market

From a head office in Managua, CEPRODEL runs 16 branch offices throughout western Nicaragua. All of the loans they offer are individual loans and require formal collateral. The work with a wide range of clients with a portfolio balanced between male/female and urban/rural. In addition to loans, some branch offices offer voluntary small business management trainings when the demand exists for this type of program. CEPRODEL also constructs housing cooperatives throughout the country and is an active leader in Nicaragua when it comes to housing issues. (more…)

21 April 2010 at 22:32 2 comments

Machismo and Microfinance

By Meg Gray, KF10 Costa Rica

There is one question that I have really come to hate during my time in Central America: “Do you have a boyfriend?” My hackles immediately rise, not because I’m unhappy with my answer, but because of how too many men react to my answer here. (more…)

12 April 2010 at 14:14 8 comments

Do you know what your lender biases are?

By Meg Gray, KF10 Costa Rica

My portfolio distribution

How do you decide what business to lend to on Kiva? And do you know what your biases are?

Besides being a Kiva Fellow, I am also an active lender on Kiva. Since I started lending in 2007, I’ve always had a few criteria that I’ve been aware of. I mainly lend to women with kids. They get an extra point in my mind if helping with the children’s education is mentioned as a priority.

But last month when I looked at the breakdown of my loans, I was surprised to see some other biases appear. I tend to loan in the Agriculture and Food sectors. A heavy majority of my loans are in Latin America.

Looking at my portfolio distribution provided food for thought. (more…)

5 April 2010 at 08:12 12 comments

Why is the last borrower of the day always the most interesting?

By Meg Gray, KF10 Costa Rica

Yorlene showing off her organic lettuce starts

Well obviously that’s not always true, but it feels like it sometimes. In this case, I have a particular day and a particular borrower- Yorlene Solano Rodríguez – in mind. At the end of a very long day last week, I met Yorlene at her house. It was getting dark and the FUDECOSUR loan officer I was with was anxious to get home. And of course, she had the most interesting story I had heard all day. All borrowers have interesting stories, but Yorlene was eager to tell me hers, which often makes all the difference.

Not surprisingly, Yorlene’s business is much more complicated than it appears in her profile on Kiva. As her profile says, she used her Kiva loan to buy 3 calves. She is planning to keep the calves for a year or year and a half  until they are fattened up and big enough to sell. Though her borrower profile stops there, her business initiatives certainly don’t.

While she is raising the calves, she is collecting the cow poop and, in collaboration with 4 friends, composting it into organic fertilizer. (more…)

25 March 2010 at 14:23 9 comments

I didn’t know “model” was in my job description

As Kiva Fellows, we have to do a little bit of everything. Train loan officers. Verify borrower information. Write journals. And yes sometimes, model for photos as a fake small business owners. Well maybe model/fake business owner isn’t an everyday activity for me, but I think it demonstrates how many different types of things Kiva Fellows fall into in the field.

In this case it was a loan officer who had never used a digital camera before.

Continue Reading 18 March 2010 at 14:20 3 comments

Microfinance in Costa Rica: A FUDECOSUR Story

By Karl Baumgarten, KF9, Costa Rica

Time Flies. I feel like I’ve been in Costa Rica for two weeks however my no-nonsense calendar tells an altogether different story.  After nearly 12 weeks learning the ins and outs of FUDECOSUR, things are going smooth. With the Costa Rican summer in full swing, business casual has been replaced by the welcome alternative of jeans and polos. For the first time, I am experiencing the holiday season with 85-degree weather and sunshine. I have tried to start weaning myself off a healthy addiction of gallo pinto, the traditional Costa Rican breakfast of rice and beans, but with little luck. Co-workers have been promised my clothes, as I will probably need to stuff my bag with salsa lazano, the secret ingredient for making the delicious pinto.

Last week was my last with FUDECOSUR, a new pilot partner with Kiva who has managed to raise nearly $70,000 in their first few months with Kiva. Over the past year, FUDECOSUR has struggled to obtain funding as commercial lenders scaled back their lending during the liquidity crisis. Luckily, Kiva lenders are generous as ever and FUDECOSUR has been able to tap this generosity to reach more disadvantaged farmers in Southern Costa Rica. In the past, formal banks rarely reached these farmers so when business opportunities arose or emergency capital was required, profitable opportunities went unmet or productive farm assets had to be sold.  Enter FUDECOSUR.

Foundation for the Development of Southern Communities


27 December 2009 at 18:38 4 comments

Where the rainy season meets the springtime, the river meets the ocean, the good wrestles with the ugly…

Alana Solimeo, KF9, Costa Rica

I am a seasoned gringa-tica.  I have made it through the rainy season and now enjoy the warmth of the sun…much deserved.  It’s a hard thing to reason with your expectations of a big life event, such as a 3 month placement in America’s favorite destination, the happiest place on Earth, because we know we’ll deal with the good and bad, fun and scary, beautiful and horrific.  The only catch is that just as the beautiful is more enlightening and refreshing than you could ever dream, the scary is darker and more lonely than you’d prepared for.


7 December 2009 at 09:17 7 comments

Women and Microfinance in Light of Machismo in Costa Rica

Alana Solimeo, KF9, Costa Rica

 I’m not here to cry wolf.  I know that the subordination of women exists to much more oppressive degrees around the world.  

 I am also aware that my ability to identify phenomena here as ‘machismo’ has everything to do with my perspective, that of a female born into a world where I have virtually no boundaries, where glass ceilings are slowly being pushed further and further away from my upper limits by the women that precede me.  But I am here to tell my stories, and I’ll do so cautiously.  This one is about my personal experience with machismo and the notions I’ve gathered spending my time with women and families in rural Costa Rica.   (more…)

5 December 2009 at 08:00 7 comments

Coffee: A Love Affair

By Karl Baumgarten, KF9, Costa Rica

4,000,0000 cups per year. 10,958,904 cups per day. 42 beans per cup.  460,273,968 beans per day. And they all have to be picked one by one by one. My fingers hurt just thinking about it. Every cup we make  is the culmination of an incredibly involved process that we all should appreciate.

Below is a video of the coffee process at AsoProLa, an organic coffee company which processes coffee from small scale farmers in Altamira, many of whom have micro-loans with FUDECOSUR


18 November 2009 at 07:04 13 comments

Farmers playing Wall Street

By Karl Baumgarten, KF9, Costa Rica

In the last 5 years, financial innovation has spread rapidly to the field of microfinance. What previously was better coined micro-credit is starting to live up to its name, with more and more MFIs starting to offer a full gambit of financial services: microinsurance, microsavings, remittances and others. Technology is enabling these products to spread faster and further. But just what are the impacts of these products and how can we be sure that microfinance is really doing all that its rosy image implies? One increasingly popular method is a randomized control trial, where individuals are randomly divided into treatment and control groups to evaluate the impacts of various development interventions. The participants are surveyed at the beginning of the experiment and again at the end. As the treatment and control groups are randomly chosen, the differences between them at the end of the period can be attributed to that treatment/intervention.

Below are a few interesting products and findings I have come across recently: (more…)

16 October 2009 at 08:50 7 comments

A Tico Welcome

By Karl Baumgarten, KF9 Costa Rica

After a rainy welcome to San Isidro del General yesterday, I was pleasantly surprised by sunshine and smiles for my first day at FUDECOSUR, an MFI working in the impoverished districts of Southern Costa Rica. With my Spanish struggling but my effort appreciated, the staff welcomed the new face around the office that promised to bring more work to their already hectic schedules. FUDECOSUR is currently poised at an interesting time during their pilot partnership with Kiva. They are perhaps days away from posting their first loans to Kiva, geared up to use Kiva’s 0% capital to expand to new, more remote regions of southern Costa Rica.

In the past, Costa Rican MFIs have struggled to obtain commercial funding as many microfinance funds bypass Costa Rica, lending instead to MFIs located in countries more often associated with poverty. Still Costa Rica is not all white sand beaches and towering high-rise resorts. Much of the country still lives in poverty, especially those small-scale farmers reliant on the large plantations to provide their supplementary though transient income. Here village banks can help. FUDECOSUR sets up credit committees that dole out agriculture loans on a demand driven basis. As these committees have an intimate knowledge of market conditions on the ground, they are better prepared to assess risk and respond accordingly. It will be exciting to watch these village banks in action; tomorrow I will get my feet wet with a visit to one of these village banks where we will be performing the first borrower profile surveys.

As for an introduction, my name is Karl Baumgarten and I am a member of the ninth class of Kiva Fellows. I am humbled to be part of this diverse, passionate group and I look forward to keeping you updated with all the happenings in Costa Rican microfinance along with my Tica Kiva comrade in San Jose, Alana Solimeo. Look out for FUDECOSUR´s loans to be coming online this week and please join our lending team, Friends of FUDECOSUR to be updated when their first agricultural loans hit the site.

5 October 2009 at 15:51 8 comments

The Power of Education and Collaboration

As I described in a previous blog post, EDESA (Kiva’s field partner in Costa Rica) works with a network of Community Credit Enterprises (ECCs by their Spanish acronym).  To reiterate a bit, the ECCs are small, grassroots microfinance organizations formed by rural community members.  FINCA Costa Rica provides extensive training in these communities to teach members how to work together to create and run a profitable business that provides financial services among other things.  I recently visited one of the oldest and largest ECCs, La Asociación de Productores de El Sauce (The Association of Producers of El Sauce – El Sauce for short). 

This ECC is a phenomenal example of what people can do with just a little money, a little training, and a lot of motivation.  The El Sauce ECC started about 17 years ago with only 13 members and no money.  They quickly grew to 23 members and Finca provided them with their first loan: just over US$1,100 to invest in farming projects across all the members.  Over the years they have grown steadily and currently have 136 members holding 531 shares and have given a total of 2,062 microloans. 

The beauty of the El Sauce ECC, however, is not just the manner in which it has provided financial services to the community, but how it has used the foundation of the ECC to expand in many ways.  (more…)

19 June 2009 at 16:35 1 comment

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