Mirtala and her Machete

I always wondered how she kept such a nice house. From the outside you could see that her walls had been plastered and painted. Her windows were reinforced with elegant black iron, and she just started to build a cement wall around her property. What stands out most about Mirtala’s house however, is the large pile of chopped wood on the side of her house. It’s a huge pile, about 4 foot tall comprising about 10 large bundles.

Mirtala is a small woman with a stern and grim face. She looks fierce with a large nose, deeply embedded eyes, dark hair, and sharp wrinkles on her face. She is a single mom of three and caretaker of her granddaughter.

One day I asked Mirtala where she got all that wood and what she keeps it for. She chopped and gathered it herself, she said, and she keeps it for her and her family, she sells the rest. Curious how this seemingly fragile and elder woman could gather all this wood on her own, I asked to come with her on one of her wood gathering trips.

Mirtala’s home is nice from the outside, but on the inside its virtually empty. She had a wood table with a few pots and pans in one corner, plastic chairs stacked upon one another in the opposite corner, and open space everywhere in between. The inside is dark and solemn, with dim lighting, the grey color from the cement engulfs the room.

She told me to come by her house at 1pm. As I walked up to her door I found Mirtala sweeping outside her house, with a machete hanging from her hip. “Hi Mirtala.” When she looked up, it looked as though Mirtala was surprised to see me. “Grab that machete over there and let’s go.” I grabbed the dull machete and followed her into the palm trees. Along with her daughter, we walked deep into the adjacent palm tree farm.

Mirtala has a son in the US. Her son supports Mirtala financially and will fund construction projects through monthly remittances. Between this son, another who lives with her, and her wood selling venture, Mirtala meets most of her needs. She has an outstanding loan with La Ceiba.

“You have to tap the wood to see if it is dry.” We seemed to reach an area where the wood was ready to cut and gather. “Hold the wood at an angle, like this, and strike it hard.” Mirtala swiftly cut through a thick piece of wood, cutting through it in two strokes. She watched as I tried to do the same. I fumbled through fallen branches. Grabbed one that I thought was adequate and hesitantly whacked at the branch. Mirtala laughed at my halfhearted attempt to cut through the piece. It took me several strokes, many adjustments in positioning and handle on the machete, but I did it.

Mirtala has a tough appearance but a gentle manner. Any time I see her in passing she gives me a hug and kiss on the neck. “How are you Tiago?” she says. She’s gained the respect of all of my colleagues. Once described as, “one of the hardest working women in Villa,” Mirtala earned her reputation through her constant activity, seemingly endless energy and focus on her kids and granddaughter.

After 30 minutes of chopping wood, we gathered all of our pieces and organized them in a bundle. I had about 10 pieces of wood, each about 3 feet in length. I tied them together with a thin piece of rope and hauled them up on my shoulder. Mirtala had twice as many logs as me. She roped together her bundle, carefully placed a clumped t-shirt on her head and lifted the bundle of wood onto the t-shirt. My bundle must’ve weighed at least 40 lbs. I had to switch the bundle onto the other shoulder several times. Each time I did this, Mirtala asked, “are you ok Tiago?”

“Listen Tiago, I know I am late on my loan. Be patient with me, I have a lot going on right now.” When we got back to her house, Mirtala gave me a glass of water and spoke about her loan.

I thought about Mirtala, this tireless woman, caretaker of two, single mother, with nothing but her machete, her stern look and gentle nature, and I knew that the loan didn’t matter. Whether she paid her loan or not, she would continue to chop wood and make incremental progress towards her goals. Her granddaughter was in school learning English, her son was sending money to improve the house, and her daughter was close by. Perhaps what little she earned from her wood sales would be better spent on supporting herself and her family rather than paying a loan to foreigner who can barely chop wood.

 

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)

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Smiling and Simplifying

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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Little by Little

She recently finished construction on her cement patio, extended the roof of her porch to reach the sidewalk, installed a six person picnic table, and built cement steps for customers to step up to the window. Inside, Josefa shows off her economic engine. “Esta vacío ahorita,” its empty right now. Josefa’s pulperia, or convenient store, is run out of her home. She sells everything from candy, to rice and beans, from bags of water, to 3 liter bottles of Pepsi. Her pulperia is what allows her to make improvements to her home and business.

Josefa (40) has a pleasant demeanor. She is soft spoken, generous and motherly. She is small in stature, about 5 ft. She has a young face with delicate eyebrows, rosy beige cheeks, a warm smile, and soft eyes. Welcoming in nature, she offers food and drink to all her guests. With such a tranquil and gracious manner, it is hard to guess that she is a single mother with 10 children, that her only husband died 15 days before their wedding, that she’s never attended school, and that she was one of 10 children.

Josefa grew up in San Jose de Negrito, near El Progreso. San Jose de Negrito is a remote mountain town accentuated by thick vegetation and rolling hills. The nearest pulperia was a two-hour walk from her home and the nearest school was a three-hour walk. Josefa is the second oldest of her brothers and sisters. Her siblings looked up to her and depended on her to take care of them. Josefa’s mother worked as a maid during the day and expected Josefa to take care of the family while she was gone. Thus, Josefa spent most of her youth cleaning, cooking, washing clothes, fetching water, and caring for sick siblings.

Josefa was 18 when she met Dionosio Escobar. Dionosio was a farmer who lived near Josefa’s home. Josefa remembers him fondly, “le amaba mucho,” I loved him very much she said. They were together for six years and had four children. Dionosio worked on a farm for a wealthy landowner. He made enough money for the family to live comfortably while Josefa spent time at home with her children. She remembers those as happy times and planned to officially marry Dionosio. Tragedy struck however, when, just fifteen days before the wedding, Dionosio was shot and killed.

“Jueves, 19 de octubre, 1997.” Josefa murmured, in a low sad voice, the date Dionosio was killed. Her eyes watered and tears ran down her check as she sat silently in thought.

With no wealth of her own, no job, no status, and coping with the loss of her fiancée, Josefa took to cultivating the land. She had enough land to grow beans, corn, tomatoes, peppers and coffee. Soon, Josefa was growing enough food for her family to live from and there was enough left over to sell in the market. What’s more, word got out throughout the community that Josefa was growing her own food. Eventually Josefa found herself juggling job offers from three different commercial farmers. She worked for a respectable wage of 140 lempira ($7) a day. It was an unsustainable venture however, as agriculture punished Josefa physically. After three years of farming, she decided to move.

Josefa found an opportunity in the community of Siete de Abril. Josefa could buy and own the land, an ambition of hers for many years. It came at a cost however: the conditions were dismal. Her house was built from cardboard, rusty tin, scavenged wood, and cloth. To start a construction project on a worthy home in Honduras, one needs a total investment of about $10,000. With her salary of $2.50 a day working at a restaurant, five children to take care of, and another on the way, Josefa’s dream seemed far off and unobtainable.

Josefa moved to Villa Soleada in 2008 through a project of Students Helping Honduras. Her home is small yet comfortable. The front room is divided in two, by the pulperia, on the left side of the room, and the living space, on the right and backside of the room. A multi-colored hammock hangs across the front of the room near the door. A couch lines the right wall. A frail metal stand houses a small television and stereo set. The grey cement walls are decorated with pictures of her children with friends and family. The pulperia claims two large refrigerators and a 4 by 6 ft shelf stand. The shelves are neatly filled with rice bags, cookies, bread, eggs, and beans. About 50 chip bags line the left wall. Her pulperia is the only one on her side of town, and serves about 22 households.

Josefa doesn’t keep formal records of her financial activity but she knows that the pulperia produces enough money to cover most of her needs. The pulperia produces enough money to pay for food, electricity, water, school tuition fees for most of her children, and enough is left over for cell phones, transportation, and construction projects.

Josefa currently has a 5,000 lempira ($250) loan with La Ceiba. She’s had nine loans dating back to 2009. Josefa used half of her current loan to pay off other debts. The other half she invested in her pulperia. For example, Josefa’s mother was sick recently and she didn’t have enough money to pay for medical expenses. She asked a neighbor for help who agreed to lend Josefa 3,000 lempira ($150). Josefa used previous loans to pay off more toxic debts. For example, the furniture in her home was bought on credit. The store let’s customers buy furniture on credit and will charge interest on payments. Some stores charge as high as 30% monthly interest and exorbitant late fees. Additionally, Josefa or her home might get robbed on occasion… the life of a Honduran. Josefa was recently robbed in El Progreso and she found the La Ceiba loan useful in supplementing her lost cash.

Josefa acknowledged that she has come a long way. She listed improvements from a year ago: a cement porch, new home furniture, a refrigerator, shelves for her inventory, she is planning new investments in her home, her pulperia is growing, almost all of her children are in school, and everyone is healthy.

As Josefa finished telling her story, she settled her stare on the cement brick wall as if her story were hidden in the cracks. Suddenly her posture changed and she sat back in her chair. Her expression went from that of a pensive and serene one, to one of satisfaction. A slow smirk came across her face. She looked at her daughter attending to customers at the window, at her son Nelson, laughing and playing outside, and at the pulperia. Her gaze turned to the wall where the pictures hung of her, her children, and her daughter in a graduation toga, and finally, she looked at me. Completely silent and peaceful, her thoughts turned to the future. “Poquito a poco,” she said, little by little.

 

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)

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(Originally posted to laceibamfi.org on March 14th, 2014)

Norma the Magnificent

She was furious. I was flustered. I gathered my belongings, my papers, folders, pen, and phone, briskly shoved them into my backpack, bid a hasty and nervous farewell to my hosts and bolted for the door. Outside, she was already 30 yards away. “Norma!” No answer, no slowing down, no acknowledgment of my yell for her. Unsure of myself, I walked after her. She walked towards her house. The closer she got, the more I yelled. No answer.

I had a queasy feeling in my gut. I was uncomfortable. It was like knocking something over in the dark, you know you did it but you don’t know what it was. I retraced my steps, my words and my gestures, anything that could have caused an offense. But, to no avail, I was too busy trying to keep up.

She reached her house and fiercely shut the front door. As I stood outside I was embarrassed to discover Maria Yaneth’s daughter, Jocelyn, whose house I had just left, was at my side asking what happened. Of further embarrassment, the neighbors across from, and next door to Norma’s house were all standing outside or looking through their windows, watching the scene unfold.

“Norma? Would you like to talk?”

Nothing of the sort had ever happened to me before. I was beloved in Villa Soleada, or so I thought. Residents routinely invited me into their homes, fed me and spoke kindly to me. I couldn’t understand why Norma was upset.

A man answered the door: Norma’s husband. With complete indifference, he opened the door, looked at me, looked at Norma standing across the room with her arms crossed, and said “would you like to come in?”

I didn’t know what to say or do. Norma certainly didn’t want me to come in. I was frozen. The man didn’t wait for a response. He left the door open, turned and sauntered back to his room.

“Norma?” She turned her head away and stood idly.

Jocelyn stepped inside. “Let him talk to you Norma.”

I couldn’t bring myself to step inside. I was unsure of my footing and didn’t want to disrespect Norma any further. A long silence passed. Norma was still, statuesque, magnificent and dignified. I felt small and pitiful.

“He only buys from people who are young and skilled and who have help from their family. I’m old and have no help! Why do you always buy from them and buy so little from me?”

My thoughts raced as I scrambled to piece together a coherent answer. With each passing second, it became increasingly clear that any response I gave would only disappoint Norma further. I told Norma that the products we buy from artisans have to be of a certain quality otherwise they wont sell. Indeed, it meant her products did not sell and didn’t meet the standard. As I spoke I could see Norma’s demeanor change. The rage in her eyes and voice were replaced by melancholy and despair. Her arms weren’t crossed; instead they were drooped by her side. Her shoulders were slouched and her head was lowered. My words seemed to suck the life out of her. “I’m not sure what I am supposed to do Santiago.”

It was a debilitating moment. I was powerless. There was nothing I could do or say that could make Norma feel better. I had nothing to offer her.

“Its ok Santi. I’ll walk you out.”

Her demeanor changed again. She seemed to regain her confidence. She walked with her usual pep. As we walked out together she put her hand on my back is if to console me. Norma asked about La Ceiba, my plans for the future, and about my family. I answered feeling no less confused than before.

“I’m sorry for reacting the way I did Santi.” She apologized to me? I thought I was the guilty one!

Norma was excluded from the program in part due to circumstances that were out of her control. She was missing out on an opportunity. It speaks to a larger question: how do we implement policies in a fair and just manner without compromising (too much) our ability to fund operations?

My interaction with Norma was one of the first honest exchanges I had with any client or artisan. It was refreshing. If honesty is necessary to build trust, Norma’s reaction was an indication of her faith in me not to dismiss her and move on. Today, Norma and I incorporate this trust into our working relationship. Norma isn’t shy about telling me where our policies fall short.

I recognize that my organization is imperfect and can be unfair for those we work with. If we are to address our imperfections, we must do so together. The process of fixing injustices, especially the ones we perpetrate, starts with honest communication. By listening to those who are directly affected by our actions, and working together to adjust our practices, we are sure to stay on the path of understanding. It can be messy and time consuming, inefficient and uncomfortable, but it’s non-negotiable and essential. It might not be the best business practice, but it’s the cost of doing business if we are to adhere to our convictions.

 

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)

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(Originally posted to laceibamfi.org on January 20th, 2014)

The Culture of Credit

For weeks I was bothered by a question. It started after a conversation with an elder family member. She suggested that my involvement in La Ceiba meant I was idealistic and naïve, and that I have a shallow understanding of what I am doing. It occurred to me recently that these are the same assertions that Ivan Illich makes in his speech, “To Hell With Good Intentions.

I am not sure what Illich would think about La Ceiba if he were alive today. I can only presume that Illich, like my family, would point out that we aren’t experienced professionals, we depend on SHH for infrastructure, our business model is unsustainable, we are outsiders, and we don’t know Honduran culture or history. Its true, the longer we carry on with the project, the clearer it becomes that we are powerless.

If La Ceiba’s primary goal is to alleviate poverty, we should stop what we are doing right now. The evidence of our effectiveness in empowering women and increasing income is inconclusive. Further, La Ceiba staff and students benefit far more from their investment in the project than clients do. We have the privilege of leaving Honduras whenever we want, students earn academic credits for taking part; I get a prestigious title and resume builder. Meanwhile, clients get a $25 loan.

We fail over and over. More than once, I misinterpreted my role in the community, we made unfair assumptions about clients, we patronized and offended, we were yelled at, rejected and pushed around. Many of our policies and products caused unintended consequences of which some in the community are still dealing with today.

Illich is right in his conviction that North American “do gooders” can cause harm to those they seek to help. He is right to imply that our culture and shallow understanding contributes to a cycle of patronization, of subjugation, of victimhood and guilt. What’s also true, however, is that we can change our culture and improve understanding.

I wonder if the mere act of admitting our limitations, privileges and failures empowers us to respond in a way where we can pursue a more just and fair purpose. Perhaps now, after admitting defeat and failure, we can say that we know that good intentions are not enough.

Since its inception, La Ceiba students and members undertook a painfully difficult evolution. We criticized ourselves, our intentions, our motivations, and we came to realize that we are broken. We know now that we can’t presume to stand for change if we don’t first change ourselves. In employing self-doubt, in challenging our assumptions and convictions, we refine what it is we believe in. What I initially took as a college economics class was in fact a space underlined by themes of justice and equality.

Out of the fog of uncertainty and fear, we were able to reach important conclusions. We recognize that our very involvement in development could cause more harm than good. We are ready to accept doing nothing as a course of action. We act in accordance with the old rule that we should treat others the way we want to be treated.

Despite our limitations, and our view of ourselves, we cannot ignore injustice. I’ve seen how financial institutions use fear to motivate repayment, how they’ve threatened clients implicitly and explicitly, how they are verbally and physically aggressive, how they intimidate, and how they set unfair terms based on the premise that the client cant be trusted.

In this instance, we have the tools to create fairness in an unfair system. I am not talking about what Illich referred to as our “sacrifice” or “help.” This isn’t help. We want to change an industry; we want to prove a point. It’s the attitude that the client can take control of her life, that she knows best how to manage her finances, that she has aspirations and dreams that are just as worthy as ours, that defeat Illich. We aren’t providing charity; we are providing a partnership, an opportunity to seek justice together. This act, of working together and learning together, reinforces an element of equality.

Many people will read this and dismiss me as another young idealist with a false sense of reality: an Illich do gooder. You don’t have to believe me. I don’t expect you to. But, don’t confuse my idealism and hope for passivity.

When we decide to go house by house, to sit down with every client who has a question, to give clients the benefit of the doubt, to document every success and failure, to write about nuance and complexity, to offer an honest and fair interest rate, to share an honest repayment rate with the world, to change the way we think about the poor, we can inspire those around us and make a dent in our industry. In the end this isn’t just a function of changing business models, it’s a function of changing the culture of an industry.

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)
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(Originally posted to laceibamfi.org on December 16th, 2013)

 

Relationship Collateral

Seven months ago I was appointed Program Director of Honduras Operations for La Ceiba. I am living in El Progreso as the first full-time employee in La Ceiba’s history. Yet, for a long time after accepting the job, I had no idea what Program Director was supposed to do. I wasn’t sure what my role was within the organization and I worried that my presence would cause an imbalance. The experiences I had as a student could not have been the same if there were a full-time Program Director in Honduras.

While I wrestled with this tension, I did the only thing I was sure I was supposed to be doing: I visited our clients one by one. We made small talk until the question occurred to me, “what do you think of La Ceiba?”

The answers to this question led me to believe that our service and product could improve immensely. The more questions I asked, the more involved and active clients seemed to get. I asked further questions.

  • What would clients like La Ceiba to improve upon?
  • What do they think of our requirements, our interest rates, and our policies?

Something unexpected happened during this time. Since the 20th of August:

  • La Ceiba’s Portfolio at Risk fell from 33%, to 8%.
  • Our gross loan portfolio went from 50,000 lempiras ($2,500) to 69,277 lempiras ($3,464).
  • We added 24 clients to our program including our first male client.
  • The disbursed principle over the last three months is 104,300 lempiras ($5,215) compared to 144,000 lempiras ($7,200) disbursed over the entire 2012 fiscal year.

I wonder whether we stumbled upon a powerful idea: did we replace collateral with a relationship? We’ve mitigated our risk despite rejecting collateral requirements, high interest rates, and the plethora of aggressive practices that are justified by our industry. Instead, we built trust through repeated interactions, constant and open communications, clear and explicit terms, and by adopting the attitude that the client can fulfill their obligations without an outsider telling them how. Clients understand our product as a mutual agreement: we won’t pressure you to pay, we’ll charge a fair price, and we won’t engage in aggressive practices. In exchange, the client makes herself responsible for her loan in the way she knows how. The only way we can make this work is if the client trusts us not to take advantage of her and we trust that she will do whatever is in her power to pay her loan.

In the last few weeks, La Ceiba students have met with Ana and I to discuss and develop policy. Together we made adjustments and reached breakthroughs. The meetings served to continue the process of questioning our policies and ourselves, but added a new perspective to the debate. It’s a further opportunity to develop the best product possible where it injects local knowledge and the clients voice into the process. And yet, it is a trade off.

Looking forward we encounter several questions.

  • Are we working towards financial sustainability?
  • Should we pursue legal recognition in Honduras?
  • Can relationships replace collateral?
  • What balance can we strike between a student-centered and a client-centered definition?

As we work towards perfecting our operations and roles, our mission and our focus, I am certain that we will do so together as a tribe, and, as we’ve always done, we wont fail to question our every step of the way.

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)
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(Originally posted to laceibamfi.org on November 24th, 2013)

 

Blade and Baleadas

When we arrived the whole family was waiting for us. Laura Isabel Luque, her sister Karina Luque, and Marina Eliza were in the kitchen cooking. The smell of cooked steak, with its herbs and spices, filled the air. As we approached several children greeted us, a lady sitting outside on her sewing machine got up to shake my hand. The three women in the kitchen quickly stopped what they were doing to greet us at the door.

Ana Lucia Galo, Eduar Isidro Reyes and I had lunch at Karina’s house on Saturday, September 21st. We are the La Ceiba team in Honduras. Laura and Karina invited us for lunch a week earlier. When I received the invitation, I was excited but skeptical. Part of me thought the lunch was planned with another motive. I thought perhaps the women wanted to receive larger loans than we had given.

Walking into the house, one cant help but feel comfortable despite its cement composition. The first room in the house is a large one that acts as the living room, the kitchen and the dining room. The walls are decorated with Winnie the Pooh pictures with Spanish sayings. The sayings contain a message of love and family. “What would you like to drink?” Laura offered us water, Pepsi, coffee or juice. “Coffee please.” Ana and Eduar asked for Pepsi.

Laura has worked with La Ceiba since January of 2013. She is a close neighbor of Elizabeth Discua, Maria Carcamo, and Tania Carcamo, all successful La Ceiba clients. Laura is a single mom with an eight-year-old boy. She has a L 1,250 ($62.50) loan with La Ceiba. In nine months, La Ceiba never asked how Laura pays her loans, and in that time, Laura received 11 loans and paid all of them back ahead of time. I was concerned because she originally asked for a larger loan than we could give her. Why does she want a larger loan? What kind of income does she have? Why does she keep inviting me to lunch?

“Lunch is ready.” We sat around the small wooden table adjacent to the living space and the kitchen. Despite its size, the table accommodated the six of us comfortably. Karina served us. We were having mini baleadas. On our plate we had four small handmade flour tortillas placed under diced steak, onions, tomatoes, lime and cilantro. It was a colorful display and a modest serving. We bid “salud” to the food and to our hosts and enjoyed the rich taste of the fresh ingredients.

Karina is a new La Ceiba client. I knew very little about Karina and her finances. Despite my efforts not to do so, I couldn’t help but observe Karina’s house from a lenders perspective. That is, the material things in her house served as indicators of economic wealth. Karina has a television and a fully furnished home. These are signs that Karina and her family have a high economic status. I didn’t want to take advantage of the invitation into Karinas home so I put those thoughts at bay.

“Santisima madre!” Everyone in the room chuckled at Ana’s outcries. We sat down to watch the movie of the day on TV: Blade: Vampire Hunter with Wesley Snipes and Jessica Biel. It was a bloody and violent movie. Every time a vampire was mercilessly decapitated, Ana would yell out in shock. “How is your family?” Laura asked in between decapitations. “Fine,” I responded. Where is your mom from? How did you learn to speak Spanish so well? Did you enjoy the food? Laura and Karina kept asking questions about me. They wanted to learn about me and my family.

Microfinance institutions (MFI’s) are taught not to trust clients. Its never stated explicitly but our operations, our products, our requirements all function under the assumption that clients, poor clients, are risky investments. And, since they often are not included into a formal credit scoring system, the MFI has to gather that information on its own. To do so, loan officers employ methods that seek “accurate information.” For example, loan officers might show up 30 minutes early to a meeting just to catch a client and their business off guard. A loan officer might show up unannounced to see how things are run when a client isn’t expecting her lender to visit. Loan officers will ask research-tested questions that seek to reveal the character of a client and afterwards will ask neighbors questions to verify information.

Eduar told the room a story. One day he was dropping off Laura’s loan. They met in front of Laura’s house. Eduar read the loan contract to Laura and handed her the check. In the exchange, Laura mishandled the check and dropped it in the mud. Eduar poked fun at Laura for being careless to which Laura responded, “I remember the first time you gave me my loan, you were so nervous you couldn’t speak!” Everyone laughed at the friendly banter. I felt as though I was in a locker room with my team, exchanging inside jokes after a hard fought game. “How are your friends at the University?” Laura already knew several of our La Ceiba students. Laura told me to tell the students hello and to invite them to baleadas.

“Santi, you all are invited to baleadas next week too!” Laura made sure to invite us all back to her sisters house. It was our cue to leave but I still hadn’t gotten asked about a larger loan or for a favor. In fact, for the duration of the reunion, we never once talked seriously about loans or finances. The topics of conversation were focused on friends and family. We were getting to know each other simultaneously. We were learning about each other’s history, our customs, our likes and dislikes, we were becoming friends. For that afternoon, for two hours on that Saturday, Laura, Karina and Marina were my friends and not my clients. They fed me, they cleaned up after me, they took care of me and I had nothing to offer them accept my good graces and my friendship. It was a genuinely good time, and I didn’t need to ask a neighbor to verify that.

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)
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(Originally posted to laceibamfi.org on September 25th, 2013)

 

Tania Maricela Bobadilla Carcamo

Tania Maricela Bobadilla Carcamo, 28, is from La Ceiba city. Eight years ago Tania settled down in Las Brisas where she still lives today. Tania followed her sister Maria Carcamo to Las Brisas, whom married a man from the town. For two years Tania lived with Maria and her husband. During that time, Tania worked at the nearby pool hall. Maria’s husband was the owner and he needed someone to help manage money and sell drinks. Tania learned how to budget, save money for the business and manage operations, all while serving drinks until late at night.

During her time at the pool hall, Tania met Nelson Discua. Nelson proved a gentlemen, he walked Tania from the pool hall to her house every night after work. They married and Tania moved in with Nelson and his family. Tania remembers those as uncomfortable times, “I didn’t get along with Nelsons mom very well.” Tania wanted to move out. Luckily, Maria’s neighbor happened to move out. Tania and Nelson moved into the new home, it was an improvement but Tania was not satisfied. The land belonged to Marias brother in law. They didn’t have to pay rent but they couldn’t stay there forever.

La Ceiba met Tania in 2010. At the time, Maria was already working with La Ceiba. Maria explained to Tania how La Ceiba loans worked but Tania remained skeptical, “I thought it was propaganda of some kind.” But, Maria and another good friend, Suyapa Santamaria, convinced Tania that La Ceiba loans were real. Tania reluctantly accepted her first loan of L 575 ($28.75).

With money from the loan, Tania invested in silver with the intention of selling to residents in her area. Her operation was mobile, she went house to house and over time she developed a strong client base. Additionally, she set up a credit system of her own. Tania allowed clients to pay for her silver in parts. That is, they paid for some of the silver at the point of sale, and paid the rest in monthly installments for two months. This system worked well for Tania because, as she recognized, it gave clients a flexible method of payment where they might not be able to pay large sums all at once. Tania recognized other benefits. She never had worrisome amounts of cash at the house and if sales were slow the next month, she could rely on payments due from the previous month to cover costs.

In less than a year Tania received and paid five loans and worked her way up to a loan of L 2,500 ($125). As her loans grew, so did her income.

Tania’s plans changed a few months ago when a family member left the country. The family member left behind two businesses that were unmanned and in bad shape. Tania, along with her mom and two sisters, jumped at the opportunity. The family could benefit from a group endeavor where everyone involved received a steady income. So, Tania left the silver business and prepared herself for the new challenge. The two businesses were a chicken restaurant, and a food stand at the local school.

Tania’s mom is the boss, everyone works equal hours, and everyone splits the profits evenly. After three months on the job, sales have increased. Additionally, Tania increased her savings and covered all her home expenses.

Tania estimates that the food stand makes between L 2,000-2,500 ($100-125) a day while the chicken restaurant makes L 8,000 ($400) a weekend. However, their success is not without its challenges. Two weeks ago the food stand was robbed. One morning, Tania’s mom opened the stand only to find the door broken open and their products were gone. They had nothing to sell that day. Tania happened to be eligible for a L 5,000 loan with La Ceiba. The loan was large enough to replenish most of the inventory and Tania paid back the loan ahead of time the next week.

With her new income, Tania and Nelson, who works in a factory, are able to take a step towards Tania’s dream. Together, the couple saved enough money for a down payment on a plot of land. The sight is nearby in the neighboring town of Primero de Enero. They are paying what is left in installments and are on schedule to finish the payments by February of 2014.

 

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)
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More of my blog posts at: laceibamfi.org

(Originally posted to laceibamfi.org on September 20th, 2013)

Marlenia Urbina

Monte de los Olivos is a difficult place to get to. It’s a small town composed of 24 houses and a community center. The town is located about three miles from the closest paved road. To get there you have to park in Villa Soleada and walk on a dirt road lined by a palm tree farm. After a 10-minute walk through the shady grove, you can find the town of Monte de los Olivos.

Until she moved to Monte, Marlenia Urbina, 42, never lived in what she considers a safe or stable community. Her life is marked by instability and friction with her parents. Two years ago, Marlenia settled down on the small plot of land that is now Monte de los Olivos.

The move to Monte came about after a long struggle. Before living in Monte, Marlenia lived in a community by a riverbank. The land was not hers and the government seized the property where she lived. Marlenia, her husband and her four daughters, were forced to move but had nowhere to go. So, Marlenia and a group of over 30 families went straight to the Mayor’s office. They organized sit-ins and protested in the streets until finally, the Mayor granted the group a few acres of land behind the existing town of Villa Soleada.

In January of 2012 La Ceiba held an interest meeting with all the families in Monte. Marlenia describes her initial reaction to La Ceiba’s loans as that of “disbelief.” “The interests are so low! I couldn’t believe that there was no collateral. We thought it was part of a plan to take our land.” Marlenia tentatively accepted her first loan of L500 ($25).

Marlenia owns and operates her own pulperia, or convenience store, out of her home. The pulperia provides Marlenia with consistent income. It is one of only two pulperias in town. Marlenia depends on her pulperia to pay for the water bill, her daughters school expenses, unexpected expenses like sickness costs, any debts she may have, and whatever is left over Marlenia invests in her home and her pulperia.

Marlenia says that her loans with La Ceiba were initially unsuccessful. She used her loan to help a family member but the family member never paid her back. Marlenia was afraid La Ceiba would not work with her anymore. Eventually, through income from her pulperia and support from her husband, she was able to pay her loan. Marlenia worked her way towards a larger loan of L750 ($37.50). This time Marlenia decided to invest exclusively in her pulperia. Marlenia bought several products to sell including 18 “ristros.” Each ristro has 12 bags of chips. Marlenia sells each bag of chips for L5 (25¢). As a result, Marlenia says that her sales have steadily increased.

In addition to her pulperia, Marlenia is the head of a group of entrepreneurial women in Monte. Together, they develop business ideas and execute them. Their activities include the production of artisanal crafts and hair products. They also work together to find new markets outside of Monte, specifically in the city of El Progreso.

Marlenia says she learned a lot from La Ceiba’s financial literacy class. One of the concepts the class covered was that of savings. Marlenia learned how to organize her finances and save towards a specific project or item. Marlenia is currently saving her money to invest in one of her group’s business ideas.

Santiago Sueiro, co-Chair of La Ceiba MFI (www.santiagosueiro.com)
Get Social with Santi:

More of my blog posts at: laceibamfi.org

(Originally posted to laceibamfi.org on September 17th, 2013)