The Best of the 2012 Ambassadors

While most other “best of” lists usually hit the press around New Year’s, our calendar here at the Ambassadors Program is a bit different. With 16 new Ambassadors volunteers arriving at our Boston offices this Monday for their orientation training, we thought this week would be the perfect time to look back on some of the best posts from our 2012 Ambassador class.

1.)     In ‘A company with a difference’ by Jerry Brady, read how one social enterprise is making a difference for a group of people long excluded from the financial system: people with disabilities.

2.)    In ‘To be a woman is to…‘ by Kate McGrath, learn about the work of Génesis Empresarial and one of their most successful groups of women entrepreneurs.

3.)    In ‘Inside in the cold’ by Charlene Nemson, see what air conditioning means for development in the country.

4.)    In ‘Can we call him a social entrepreneur?‘ by Guila Angi, meet a client of Paraguay’s Financiera El Comercio and learn about his successful dairy business and the additional support he lends to other budding businesses in his community.

5.)    In ‘The stuff that doesn’t get lost in translation‘ by Asya Tabdili, find out how Accion is providing financial literacy training to thousands of entrepreneurs in India – by watching a video she created.

6.)    In ‘Mobile Money Part I (Strange Bedfellows) and Mobile Money Part II (Different Strokes)‘ by Abhishank Jajur, you can finally get the basics of mobile banking – in a fresh and clear way.

We’re about to kick off another great summer of stories from the field from around the world of microfinance – so stay tuned for the best of 2013 from Paraguay, Guatemala, Mexico, Peru and India.

Learning a new skill to help pay the bills

María Dolores Valdéz, 35, and Nilda María Achucaro, 51, have been collecting and selling recyclable materials in northeastern Asunción’s Santa Ana neighborhood for eight years. It’s good work, says María, who does it with her husband, sister, and niece (who also works as a maid). They go out in the evenings with their horse and cart, and once a week a buyer comes to take their haul.

But for collecting around 400 pounds of plastic, aluminum and plastic bags per week, María and her crew only make between 200,000 or 250,000 guaraníes (about $50 to $60). Shared between the four of them, this puts each person below Fundación Paraguaya’s 2012 extreme poverty threshold of $78 per month. Nilda, who works the waterfront on foot since her cargo motortrike broke down, earns even less.

A horse and cart used to haul Maria’s goods, during a re-shoeing in Santa Ana.

When they joined Fundación Paraguaya’s clientele as leaders of the women’s committee Mujeres Valientes  (Courageous Women) a few years ago, María and Nilda started up a line of business and a new source of income: making and selling jewelry and embellished flip-flops.

Loan Officer as Mentor

How well do you know yourself? What do you consider yourself talented at? What dreams do you have?

These questions are ones that can easily put people on a thinking spree, but for the loan officers of Fundacion Paraguaya, these are the questions that they ask every day to the women’s committees with whom they work. A typical committee is made of around 12-17 women, and with such a large group, you are bound to see all kinds of personalities and a unique life story for each female member.

During the first few loans, the loan officer is the mentor to the group: she motivates the women to be entrepreneurial, to value their own ideas, and to understand the steps and start thinking about how to start a business, among other things. But as time passes, and the women repay and renew their loans, and start and improve their businesses, a mentor emerges from within the group and takes on the role of the committee president. Usually the president exhibits more security thanks to a higher than average education or income and this helps her lead others in the same route.

 How to get Josefa to smile?

Ever wonder where the other pair goes?

In the Fundación Paraguaya Microfinance Office, Alcira Añazco is working hard to receive some special visitors—and their luggage. If you’ve ever wondered where the other pair goes when you buy your Tom’s (the shoe company that donates one pair of shoes, for every pair purchased), here’s the scoop. In March, officials from Tom’s Shoes will be arriving in Asunción with a second shipment for the Fundación.

The first shipment came in July of last year, and Fundación Paraguaya loan officers have been busy distributing them to clients of the Womens’ Committees as one of the perks they receive beyond credit and support as borrowers. The two requirements for receiving a pair are to be part of a committee in good standing and to have a child under the age of 18 (who will receive the shoes). In addition, a pair went to every student at Fundación Paraguaya’s agricultural schools, where they are reportedly now high fashion, the thing to wear to parties and for visits home.

I first encountered this shipment of Tom’s in the trunk of Encarnación loan officer Liliana Lugo’s car as I went with her on her client visits. When I returned last week for a good-bye visit, I found all of the Encarnación team sporting Tom’s—a gift for the new year from Fundación Paraguaya.

The Encarnacion team all with their Toms shoes – these ones a gift from the Fundacion to its staff.

The shoes that are coming in March are destined for even broader distribution. Besides arranging everything for their arrival, Alcira is also coordinating with Fundación Paraguaya’s Junior Achievement program for young entrepreneurs, Junior Achievement’s Aprender a Emprender en el Medio Ambiente program (roughly, “learn to be an environmental entrepreneur”), and outside collaborators Fundación Moises Bertoni (a conservation and sustainable development foundation) and Fundación Dequení (an anti-poverty foundation) to get the shoes on the feet of more young people in Paraguay.

My story with microfinance

While there will be more stories to come, I wanted to first share my own personal story… When I was a teenager I moved from grey, modern London to my mother’s homeland Monteria, the steamy and colorful North-West of Colombia, an area well-known for its music, literature and a tropical love of life. In England we were a small family of four, and in Colombia, once my youngest brother was born, we became part of an extended clan. Sundays now meant family lunches at my grandmother’s house, and sitting outside in the porch for afternoon gossiping with the neighbors.

Having lived in the flesh in both of these very different realities,  I soon became passionate about social and economic development in emerging countries. I wanted to contribute in some way but first I needed to understand the base of the social pyramid. While I lived in Bogotá I volunteered in Techo building houses in the slums and did research with my professors during my undergrad searching for sustainable solutions to overcome poverty in Colombia through access to financial tools and education. That is how I came to learn of Accion…

What does solidarity mean, anyway?

My time in Paraguay is winding down, and I’ve been spending a lot of time in Fundación Paraguaya’s microfinance headquarters, crunching the numbers I gathered in my office visits, working out what makes the women’s committees tick—and what doesn’t.

First, what are the women’s committees? They represent a way of borrowing working capital that’s different from the way you or I might do it. Instead of borrowing individually and guaranteeing the loan with collateral or your credit rating, clients in Fundación Paraguaya’s women’s committees borrow together and guarantee the loan primarily with their solidarity as a group.

So then, what is solidarity? It is actually a deceptively simple concept: the degree of integration between separate social groups.

But in a complex society, it is obviously more complicated than that. The traditional – familial – source of solidarity still exists (even with Fundación Paraguaya setting limits on family relationships within a committee). Plenty of grown sisters, sisters-in-law, cousins, mothers and daughters join a committee and borrow together. But in addition to just familial relationships, there are many other reasons  women join a particular committee too, like friendship, home or workplace proximity, shared history (such as being displaced by flooding from the Yacyretá hydroelectric dam in Itapuá), shared work activities, and even shared experiences borrowing from Fundación Paraguaya in the past.

So, if solidarity refers to the relationships within the group, it still has to manifest itself somehow. In the case of the women’s committees, if for some reason a member can’t pay her loan installments, the committee (using its petty cash fund or, in worse situations, its group savings) steps up to help her with her payment. The group is responsible as a whole for each individual loan. The vision is beautiful: a woman gets sick and her co-borrowers dip into the savings they’ve built together (though group activities like street parties, artisan fairs, food sales, and soap-making) to pay the loan installment that she can’t. They may help her out in other ways as well, such as buying her a basket of groceries and pitching in around the house. At its best, this is what solidarity look like within a women’s committee at Fundación Paraguaya.

But, as you may suspect, results, and circumstances, vary. Some groups realize this ideal situation of solidarity on their own and upon encountering their first problem, while others struggle to figure it out, and even still some groups never find an answer. If payment problems go on too long, the group’s savings (and spirit) suffer until they can’t cover the gaps anymore.

Juana, age 74, eco-entreprenuer

Pineapples, carrots, tomatoes, fresh-shelled beans—their wares are spread on two cloth-covered tables in front of the municipal building of Obligado, a large town about twenty miles northeast of Encarnación. This group of women, clients of Fundación Paraguaya, established this market two years ago and have run it every Friday and Saturday since. But there is more for sale that just foodstuffs and today the group has invited me to their most recent training and meeting.I sit and listen (or more accurately, watch, as these rural women speak Guaraní among themselves) as loan officer Gladys leads them in a training on encouraging their children to save. One of the women has to leave early, but as she is going, she comes close by my left shoulder to show me her purse.

The exterior is soda bottle plastic laid flat, through which you see the main decoration, a large, orange fabric flower, backed by a lining of embroidered, lacy fabric. The handles appear to be made of drinking straws. It has the charm of a shadow box, and it’s eco-conscious, too.

“Is this your design?” I ask.

“No, she made it,” the woman answers, pointing to the oldest member of the group, Juana.

As the training ends and Gladys begins to collect signatures for the new cycle of loans, I fall into conversation with Juana de Dios Borda, age 74 and a widow for 16 years. When her loan committee formed, she was well beyond 65, the official upper age limit for a Fundación Paraguaya client. But her fellow borrowers went to bat for her, saying that she was a hardworker and would be an asset to the group. She wanted to join because she likes to work. She would be bored otherwise.

Juana has been making the plastic bags, as well as upcycled plastic kits for toting around a thermos and a guampa for making Paraguay’s favorite summertime drink, terere, for six years. She can make two in a week, and each one uses 10 to 12 soda bottles. They sell for about 35,000 guaraníes (about $7.75) each.

Juana de Dios Borda showing off her innovative bag.

Besides her plastic products and the garden produce that is her reason for participating in the Obligado market, Juana makes embroidered tablecloths and napkins. 

Meet Diana Bernal

The woman in front of the ice cream shop looks slight and shy, but she strides up to greet me with a handshake as I step out of her loan officer’s car, announcing, “Hi, I’m Diana, and I’m the secretary of Mujeres Trabajadoras.”Diana is 29 years old, a single mother of a two-year-old daughter. Until her pregnancy, she was a psychology student. In fact, she says, “Since I was interning in a hospital anyway, I worked right up until the last day.”

Her daughter’s birth put Diana’s studies and work on hold, and she spent the first year in her apartment in central Encarnación taking care of her baby. “But I was bored, and I hated being so shut in. And I was spending money needlessly.”

A year ago, Diana moved back in with her parents and, with help from a loan from Fundación Paraguaya, opened up an ice cream shop next to her mother’s bookstore in a neighborhood on the edge Encarnación, a small and tranquil but fast-growing city that has seen big changes in recent years due to the completion of the Yacyretá hydroelectric dam some 50 miles downstream on the Río Paraná. Although Diana is not among them, many of Fundación Paraguaya’s clients here were displaced by flooding due to the rising waters behind the dam.

When our meeting with her loan committee, held in her mother’s bookstore, is over, Diana leads me to her shop, where she cheerfully scoops out and weighs generous portions of ice cream for me and other customers. With true entrepreneurial spirit, Diana used her social network to find a source of ice cream that was tasty but also inexpensive enough to sell at prices that would sell outside of the city center. It was a smart move; business seems brisk.

Diana and her daughter in her ice cream shop.

“I plan to finish my degree when my daughter goes to school in a few years, but it’s so good to have something to do in the meantime, and to earn some money. And it’s really good to spend this time not just with my daughter, but with my family, too.”

Saving starts young

Why is it a good idea to save? What can we do with money that we save? What else can we save besides money?

These are the questions that a Fundación Paraguaya loan officer asks her clients when she presents the Children’s Savings training to their committees. Outside of Encarnación, Gladys offered this training to three groups while I observed. They were engaging sessions, not just for the participatory way in which they were run, but also because the training calls on the clients to share what they learn, and the ideas they generate, with their children.

At one of Gladys’ meetings, we were lucky enough to have two attendees who were the right age to appreciate the lessons being taught. I asked Guadalupe and Karen what dreams they wanted to fufill with their personal savings.

Guadalupe

Guadalupe’s dream: she wants to buy more toys.

Karen’s dream is more specific: she wants to buy a doll. When her mother mentioned that she already has a doll, Karen clarified, “But I want a doll that talks.”

Karen

A Practical Lesson in Microfranchising

Lucia, who runs Fundación Paraguaya’s microfranchise program, agreed to tell me all about it, and how it interfaces with their microfinance program, this afternoon—as long as I joined her in the warehouse and helped her ready some laundry kits for the courier.

Lucia, in her office.

And so I questioned her, as I loaded bleach and other ingredients for detergent and fabric softener into large plastic bags, and she loaded the bags into cardboard boxes.How many microfranchises does Fundación Paraguaya have? Five: eyeglasses, jewelry-making, laundry, grocery, and pharmacy.

Which one is the most successful? The laundry, definitely. And most of them sell better in the towns and rural areas than in Asunción.

How do clients find out about the microfranchises? I go to the women’s committees’ meetings and promote the kits. The loan officers already have too much work to do to add this on.

How do the women use the kits? They sell the things, or make things to sell, usually in their own stores or wherever they sell.

How do the microfranchises interface with the microfinance program? Only members of Fundación Paraguaya’s women’s committees can use these kits.

Don Omar says that the Fundación is looking for new microfranchise opportunities. Have you heard any good ideas from the women? The most requested is ice cream.

Wouldn’t that be a logistical nightmare? I can barely think about it. You see, the program is just me. I do what I can, but it’s enough work for four or five people. The meetings and promotion; reviewing providers and costs; the shipping and receiving; the billing; developing new microfranchises… And after I leave here for the day, I go to my other job, teaching.