Guillermina has a winning smile. Her enduring kindness makes those around her feel comfortable and at ease. She has a jolly and convivial disposition but she doesn’t thirst for attention. She’s like the witty aunt who takes part in banter from her chair in the corner. Despite her age (40’s) and a 4th grade level of education, Guillermina makes a point of advancing her education. Guillermina has showed up to every financial literacy class La Ceiba has offered. Further, Guillermina is enrolled in an adult education program with the Honduras public school system. Every Saturday, for three and a half hours, she receives classes and tutoring from high school students. They give her lessons and individual attention that complements thick study packets for homework.
Guillermina isn’t a typical microfinance client. She doesn’t own a business and doesn’t have any aspirations to do so. She is responsible for one minor, her daughter. They live together in Monte de los Olivos, a tiny and new community in El Progreso. Monte is poor. It lacks basic infrastructure like a sewage system, running water, paved roads, electricity and law enforcement. Her daughter Sulma has an unusual health condition that requires monthly visits to the hospital for check ups and, if required, shots and tests. The costs are tough to cover all at once. Guillermina is only able to pay the fees in parts, an agreement her doctor and health providers have agreed to… for now. Guillermina takes advantage of La Ceiba’s hands off policy by investing her loan in medical expenses.
Guillermina has interesting repayment habits. She likes to pay her installments in bunches and large sums. A couple of months ago, Guillermina requested a new, bigger loan but was rebuffed. Her repayment was poor, reflected in her credit score, and she would have to repeat the loan amount.
I met with Guillermina to tell her the news. We sat around a table in her living room. I explained her situation and the decision not to extend a larger loan but she didn’t quite understand. Between the language barrier and the technical vocabulary inherent with financial products, the explanation of why she couldn’t receive a larger loan was not very clear. She later admitted that she didn’t understand much of what I said. The message she was hearing was that her performance was poor and that is why she couldn’t receive a larger loan.
When she heard this message she bore a disgruntled look on her face. In a dramatic change, her face morphed from her content smile, to a displeased smirk and squinted eyes. Her brows were furrowed and she was motionless. Her stare was locked on my face, I felt as though she was shooting daggers out of her eyes.
I kept trying to rephrase my explanation. I used different vocabulary words, analogies she could understand, and visual aids. I felt it necessary, out of my own discomfort, to keep reassuring her that she should not worry or be upset. After about a half hour of back and forth it was clear that I had done as much as I could. I told her flatly that her next loan would be the same amount as the last and to call with any further questions. We shook hands and wished each other a curt farewell.
A month later Guillermina called me. “I’d like to talk to you Santiago,” she said. We held the meeting at her house again, in her back yard this time. As I sat down I didn’t really know what to expect. Some part of me thought she was going to voice displeasure at my service or the product. She initiated conversation, “I’ve been thinking, I want one installment paid in six months.” I was surprised.
She wanted a one lump sum. I had never offered or given a loan with a one lump sum over that period of time but I saw no reason why it wasn’t possible. I told her the interest might be higher than if she paid in weekly installments. She said she didn’t mind. She found that keeping track of many installments was too much work and our credit score too complicated for her to try and calculate herself. She was simplifying. She wanted one payment in 6 months when she saved up enough to pay it. If she could pay it earlier, that option was open to her too.
I realized I had made a mistake. I dismissed my first conversation with her as a complete communication failure. I assumed that she didn’t understand anything what I was saying. She understood a lot more than I thought. And, she was able to analyze her situation astutely so as to ask for a schedule that fit her needs best. It’s this ability to understand your own situation that I was overlooking. She turned her weakness from her previous loan, paying many installments on the same date, into a strength by paying her entire loan in one installment.
Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)
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