Poverty Is and Poverty is Not

Working in microfinance, aid, and development more broadly, obviously requires talk about poverty and change. Too often though, we set out to find answers to poverty without actually knowing what it is. Gaining a clear view of reality, of what it means to be poor and what our role is as partners in the struggle for advancement, is the first step towards changing things for the better. It’s a dynamic process, a constant evolution that requires patience and understanding.

So here is my attempt at understanding what poverty really is:

Poverty is not an unpaved road. Poverty is the business that has to spend extra money to fix their truck because the roads aren’t fixed.

Poverty is not hot weather. Poverty is not having anything to fall back on when drought withers away your harvest.

Poverty is not frequent power outages. Poverty is the business that grinds to a halt and loses its customers because of the outage.

Poverty is not a room without furniture. Poverty is living on land that’s not yours, not knowing for how long you’ll be able to stay.

Poverty is not trash-strewn streets. Poverty is a lack of garbage pickup and a faulty sanitation system.

Poverty is not a choice or a lifestyle. Poverty is feeling trapped by a shortage of jobs and opportunity.

Poverty is not an open-air classroom. Poverty is a mother who is unhappy with her child’s school, unable to put her child in another. Poverty is a failing school system that doesn’t give teachers the resources they need to succeed and the teacher who hits his students instead of talking to them.

Poverty is not a shortage of family values or love at home. Poverty is a single mom whose parents weren’t around when she was young and has to learn, on her own, what it means to be a parent.

Poverty is not a tourist attraction or an act of solidarity. Poverty is the lawyer who gets shot for representing the underprivileged in the face of powerful interests.

Poverty has nothing to do with the look of the place. Poverty is feeling unsafe in your home because of a robbery that occurred down the street the other day knowing that the police never showed up. Poverty is petitioning your local government for a police presence only to get turned away.

Poverty is not a business opportunity. Poverty is choosing between funding your home business (which pays for everything else) or sending your child to school for a year.

Poverty does not define the poor. Poverty is just one part of a poor person’s life. That poor person is also a father, a mother, a husband, a wife, a soccer player, a musician, a jokester, a card player, a dancer, and so much more.

Poverty is not just about income and material needs. Poverty is a generation who loses their culture and traditions because they look up to the foreigner, and his way of life, instead of learning about their fathers and forefathers from their past.

Poverty cant be neatly defined on a website or encapsulated in a picture. This post doesn’t even come close to defining what poverty really is. What we can do is understand that there’s nothing we can read, see, or experience that can give us accurate insight into the problems of poverty. This understanding serves to challenge our assumptions and put our relationship with poverty into perspective. The complexities of poverty make it impossible for an outsider to fully understand the problems of a community. Maybe outsiders do in fact have a role to play, but it’s not the part of “hero”. The heroes of this story are the poor.

I am still learning about what it means to be poor, what it means to be Honduran, and where I fit into that narrative. I do know that it’s not up to me to fix things. Its up to the poor to understand their condition and advance their cause. And if in the meantime they ask me to stand with them, I’ll be ready to help.

 

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

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Coffee and Donuts

Image by Kim Geiser via Etsy Shop

“Somos cabeza, no somos cola”

We are the head not the tail. They sang a hymn for me on the day after my birthday. Reina on the guitar, Norma at her side, Carmen at mine, Marlenia at the opposite end of the table, and nine other women joined in.

It was Saturday morning at our weekly coffee and donuts gathering. This Saturday however, was June 14th, the day after my birthday. Clients found out about my birthday last month when Josefa, another La Ceiba client, spread the word. Josefa had celebrated it with me last year. In an intimate gathering, we shared an afternoon at her home. Josefa cooked a delicious chicken and we broke a piñata afterwards. On this day, the women of Villa Soleada planned to sing songs and share gifts.

“Por eso gozo y nadie me quita el gozo”

That’s why I’m happy and no one can take that away. Carmen had the loudest voice of all.

A year ago Carmen moved away from Villa Soleada. Carmen is a big lady, with dark hair, black eyes, and a round face. She is gentle and affectionate and always gives tender hugs. Carmen has a loud singing voice but a soft yet confident and firm tone that makes speaking to her an intimidating experience.

Carmen is best known for her work as an artisan. She is a leader in Villa. She often has the best quality products and sells the most clutches during volunteer season. As such, she commands respect among the other women. When one does business with Carmen, it is easy to see why.

Carmen is savvy. In meetings, Carmen usually employs a specific pattern. She will greet me, give me a big hug, she will tell her children to do the same, she will ask how my family is doing, and finally how Dr. H is doing. Only then will she get down to business in a direct manner while maintaining an affectionate tone. In a past life I am certain that Carmen was a politician. She knows how to use the art of flattery and misdirection in her favor.

Carmen moved back to Villa recently. She asked if she could receive a loan. Carmen received a loan in January of 2012, that debt is outstanding. I explained that she could not receive another until she paid her debt. This was not an acceptable answer to Carmen. She gently questioned the policy, and asked me to double-check my records. After several minutes of back and forth, Carmen finally gave in and accepted the policy. She left me uncertain however, and belabored the point so effectively that I felt unsure of it myself. I felt the need to confirm it with my colleagues.

“Despues de quitar prestado, vamos a prestar”

After getting a loan, we will lend. Reina learned how to play the guitar by reading “how to” manuals and watching famous guitarists play on TV.

Reina is one of La Ceiba’s most active clients. Reinas husband, Rigoberto, uses part of Reina’s loan to fund his medicine sales. This serves to support their family of six. Rigo lives in El Progreso, apart from Reina, and visits Reina on the weekends. In a recent visit, I found that she was sick with a cold and migraine. Reina was upset with Rigo that he hadn’t come home yet or sent any money. Reina stays at home to care for their four children. She works hard to keep the house together. Sometimes Reina feels that Rigo needs to be home more and that he isn’t fulfilling his responsibility as a father.

“Rigo sends his birthday wishes,” Reina told me before she started singing and shortly thereafter Rigo himself called.

On this day, Reina was not sick, her young ones were playing close by, her oldest was at home playing on their new (used) computer, and Reina herself was leading the group in song.

“Nacimos para conquistar”

We were born to conquer. Norma was sitting off on the corner but her presence was certainly felt. Her body swayed back and forth in her chair as she clapped to the beat of the song and sang in her raspy and off-tone voice.

Norma is a small lady. She has grey and brown hair. Her face is marked by deep lines around her mouth and across her forehead. Norma’s most prominent trait is her jovial spirit. She is affectionate, has a great sense of humor, and silly mannerisms.

A few minutes earlier Norma arrived bearing a gift. She bought me a pair of socks and wrote a short but heartfelt note. We sat as I thanked her for the kind gesture. She asked me all the usual questions until we touched upon a new topic. Another woman asked Norma how many children she has. Norma responded that she didn’t have any. She had two sons who died a while back, and a third she lost in a miscarriage. As she remembered those she lost, her eyes began to water; she stopped speaking for a moment, and wiped away tears. Her jovial spirit was gone. There was a long tense pause at the table. She looked melancholic. “It’s a hard thing to lose a child. And now I am alone.”

I’ve known Norma for over two years and this was the first time I had heard her speak about her children. Suddenly, I looked at Norma differently. This woman, almost 60 years old, with no family except for her husband, had so many reasons to shrink from the world, to succumb to despair and grief, and to become cynical. It was admirable that she had kept this to herself throughout our entire relationship. Now, I understood her jovial spirit differently. It wasn’t merely a quirk or a fun character trait, it was a manifestation of something else: of her hopefulness and resiliency.

“Si se puede, claro que se puede”

Yes we can, of course we can. Marlenia Urbina wasn’t singing, instead she clapped along to the rhythm of the song.

Marlenia lives in Monte de los Olivos. Marlenia has had success with La Ceiba. She won first place in the Business Plan Competition, she participated in three financial literacy classes, she started her own business and built it into the most successful one in her community, she is supporting her four kids, she helped in leading the movement to win the land she lives on now by organizing sit–ins and protests at the mayors office, and she just recently won a jump with La Ceiba (a 4,000 lempira loan), her 10th loan.

Two months ago Marlenia took in her eldest daughter who had been living with Marlenia’s ex-husband. Marlenia was hurt and disappointed when her daughter left home. She ran away with a neighbor apparently motivated by love. Marlenia tried to advise her daughter to stay in school, get her high school degree, get a job and stay with her where it is safe and stable.

She told her daughter that nothing comes easy in this world, if she wished to start a family and find success in her life she had to work hard and make sacrifices, that everything Marlenia had done, all the success and stability she had found, came as a result of perseverance, hard work, and grit. Marlenia told her daughter to take the initiative, not to wait for good things to happen, but instead believe in herself and invest in her future by studying hard.

Marlenia’s advice was reminiscent of something Seth Godin or Steven Pressfield would say. I was also reminded of my own lessons, hard won through the challenges and struggles of my job. Marlenia had learned many of the same lessons on her own, through her own challenges, and was making those work for her and her family. This quiet, often expressionless, lady was fierce and tough under the surface. And yet, she wasn’t satisfied; she felt that she was failing as a mother; she wanted to do better.

The kind gestures and expressions of affection moved me. But that was not what resonated with me most. What I was reminded of that day was that these women, who many would classify as poor and ignorant, are, in so many ways, the opposite. They are rich in character, they are wise, they are complex, they can be mean, they can be loving, they are struggling, and yet they are confronting their battles on their own, making progress little by little.

Its easy to make assumptions about those we don’t understand, its even easier to get lost in the technicalities of interest rates, repayment rates, and bottom lines. What we cant forget is that these women are full individuals, capable of achieving great things, and yet at risk of getting hurt. We have a responsibility to learn from them, to continue to widen the path towards understanding, and to remember that they are not our subjects, but our equals.

 

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

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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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Two Santiagos

There are two Santiago’s. Santi the student and Santi the Program Director. They are on the same team yet, like all teammates, at times they are odds with one another.

Santi the student employs self-doubt. He was given the space to explore his insecurities and his fears, and to create something from nothing. He did it with the support of his teammates and guidance from his professor. In the end he learned to engage with his fear and use self-doubt.

Santi the program director is confident. If there was little structure in La Ceiba class there was even less in Honduras. No supervisor, no professor, no teammates, it was Santi, on his own, trying to figure out how to deliver loans to 40 clients. There was no time for self-doubt, and confidence wasn’t a choice, it was a requirement.

Santi the student faces an abstract consequence. The consequence of his conscience. He isn’t worried about disbursing loans on time. Santi the student is refining his moral compass, is thinking about what is right, about what he wants to stand for, and about what he wants to do, not now, but 15 years from now.

Santi the program director feels tangible consequences. He is where the clients are, available to them almost 24/7. If a loan fails, if the service is bad, if the product isn’t good, he hears it in person, face to face with no filter or buffer. And, if clients aren’t happy, if the Board isn’t happy, then his time with La Ceiba could end. He isn’t worried about next year; he needs to get through this year.

Santi the student is an idealist. He believes we should be wholly responsible for tackling injustices. He rejects historical precedents. He has a fresh take, a creative flare, and a habit for questioning authority. He wants to talk about the merits of loans, not the practical matters of loans. He wants to discuss the culture of credit, to challenge our assumptions and create new, more fair, products.

Santi the program director is an idealist too but he understands how hard the fight is. He’s seen first hand how capable clients are and believes they can do more to achieve their goals. He’s also seen how difficult poverty is. Clients should do more, we should do more, its complicated. He values the practical and pragmatic, the efficient and institutional. He wants to create checklists and procedures. He is good at getting from point A to point B. He doesn’t have time for new ideas; he’s busy making the machine to run on time.

Santi the student has a life. La Ceiba is a top priority but it’s not the priority. He has lots of friends, an active social life, he’s interested in other subjects, he loves sports, and he has a family who he loves. Sometimes he misses deadlines or forgets to respond to an email. “It’ll be there tomorrow,” he says.

Santi the program director is La Ceiba. He lives a block away from his office. He visits clients almost daily. He thinks about La Ceiba all day. La Ceiba is the top priority. It’s what he’s working on when no one is looking. Its what he works on when he turns down invitations to go out. It’s what he thinks about at night before going to bed. He never misses a deadline or forgets an email. “Lets set a time table for this,” he says.

Santi the student doesn’t take himself too seriously. He understands the world beyond La Ceiba. He knows that he’s in this for the long haul. He’s planning something big that takes time and space to take flight.

Santi the program director understands that this isn’t a game anymore. This is for keeps. The stakes are high and the challenges in our way don’t sleep or rest. If I don’t deliver, the consequences are real and I don’t get to party this weekend.

Both the student and the program director understand that sometimes its necessary for them to work together, sometimes the student has to lead, and sometimes the program director needs to take over. In the end they both have their role to play. Sometimes I need to be Santi the student and sometimes I need to be Santi the program director.

The same is true for the organization. At times we need the students to take over, at times we need the program director to take charge. The difficulty is in deciding when.

 

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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More of my blog posts at: laceibamfi.org

(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)
Get Social with Santi:

More of my blog posts at: laceibamfi.org

(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)
Get Social with Santi:

More of my blog posts at: laceibamfi.org

(Originally posted to laceibamfi.org on November 24th, 2013)