This the second part of a series describing Kiva and microfinance in Bolivia. View the first post to find more information on Kiva.
We hear a lot about microfinance empowering the poor, but who are these people that we are ostensibly helping? Are we actually helping them? At least at Fundación Agrocapital in Bolivia, the answer is an uncontestable "YES."
The entrepreneurs I interviewed while working at Kiva last summer professionally explained the workings of the projects that they had carefully seen to fruition, telling me that their micro-loan assisted businesses now provide them economic peace of mind, more freedom to create their own hours and be with their kids, ability to invest in their children's education and daily needs, and more connectivity to the rest of the world through cell phones, TVs, DVD players, and online access at Internet cafes. Almost every female entrepreneur told me that she wanted her child to become a professional and have an easier life than hers. Every borrower, even if s/he lived in a two room hut, took me in as his guest and offered me Coke, food, and even presents. No matter how little they had, these entrepreneurs did not think of themselves as destitute; I was a guest in their home and they wanted me to be comfortable.
They were also grateful to have access to micro-loans and surprised to find that there were strangers in foreign lands interested in supporting their ventures. In these videos, Carmen and Emma thank lenders and explain the impact micro-loans have in their lives.(Read more on my perception of Bolivian poverty in my Kiva Fellows Blog post.)
Though borrowers in Bolivia have diverse businesses and ambitions, I found a number of trends across the three regions in which we worked: La Paz, Cochabamba, and Santa Cruz. Entrepreneurs were positive and hard-working, sometimes waking up at 4 or 5, and almost always working on weekends. Here are a few different categories of businesses, along with real stories of borrowers:
Ambulatory sales: Most entrepreneurs start out their businesses by selling on foot. These entrepreneurs will carry their wares (clothing, snacks, meals, cosmetics) on their backs and travel door-to-door and through bustling marketplaces to find potential buyers. Many of these women will travel 100 miles or more several times a month to buy cheaper products in border towns and sell them in their hometowns.
Some of these businesses let entrepreneurs just eke out a living, while others have the potential to grow quickly, like Leonarda's solar ovens that use no natural gas, only sunlight. Glass sheets let in sunlight from above, and a layer of wool insulates the bottom and absorbs the heat.
Leonarda tells me that these ovens work perfectly, just like a standard natural gas-fueled oven, and are of high quality; most last for at least ten years! In fact, there is a big market for these ovens in the Bolivian countryside where consumers do not want to spend money and time buying natural gas tanks. These consumer are even aware that the ovens are environmentally-friendly. Leonarda uses her oven to make all kinds of food, including mote (a cooked grain usually eaten with charque, sun-dried llama meat or beef), rice, and cakes.
Over a few loan cycles, the family has reaped enough profits from this innovative business to buy more food for their family, a television, a DVD player, and a plot of land on which to build a house in the future.
Market stalls: If the entrepreneur is successful with ambulatory sales, she or he will save enough money to pay the monthly fee for a market stall. This is the next tier. Now, the entrepreneur has access to a large volume of clients and can sit down, though some prefer to open their businesses outside their own homes in order to be with their children during the day.
Maria Silvia used her loan to buy more products for her wallet stand, which has grown a lot with the help of micro-loans; she recently expanded to two stands in two different parts of the city. In the past, there wasn't enough food. Now, Maria brings home milk, cereal, and bananas every night, and her six children are never lacking nutritionally. Right now, they only have two rooms in their home, and in the future, Maria would like to take out a loan to build two more rooms on to her home for two of her children.
Micro-loans have also helped Maria on a psychological level. Before she took out her first loan, she felt oppressed and isolated, selling a few products out of her home. Now that she has the resources to have her own market stall, she has more friends and is more motivated to work hard to pay back the loan.
Constructed rooms: Depending on the product they sell, some entrepreneurs are able to build a room on to their homes for their businesses. Others set up a stall outside their homes. These businesses can be set-meal lunch/dinner joints, small convenience stores, or hair salons. These require a lot more investment, so these entrepreneurs usually have individual loans with a higher credit limit (v. group loans.)
Serial entrepreneurs: The majority of borrowers that succeed in one business are able to start another business on the side.
Griselda, a creative 30-year-old entrepreneur from La Paz, runs a small food store, sells clothing by delivery, makes artisanal purses and mirrors on the side, and helps her husband with his windows/doors store. Griselda's biggest goal is to open a clothing stand on the main street instead of selling through order and delivery, and she is considering exporting her artisanal mirrors and purses. Griselda recently bought a computer for her children, who are 7, 10, and 13, and hopes to save up enough to study social work someday.
In the end, the personal stories allow us to experience the impact. Micro-loans helped cassava seller Juana bring in more profits to feed her family two to three times a day instead of once a day. They allowed Martha to jumpstart her business of embroidering traditional clothing for festivals, which transformed her life. Martha's family had one bed and no kitchen-they used firewood for cooking. After her business grew, she now has a kitchen with a stove and refrigerator, more food, better health, a television, and a bed for every member of the family.
Micro-loans have allowed thousands of individuals like these to get their businesses on their feet. And speaking with the poor themselves is integral in order to assess impact and find more solutions for poverty alleviation.
To sum up the spirit of micro-loan borrowers, Virginia, a proud single mother of nine, explains:
"I'm doing well and have made all my payments without a problem. All by myself, I'm lifting myself up, little by little. When you have a responsibility, you do what you need to to fulfill it, even if it means not eating so your kids can. It's hard, but as they say, 'Wanting is power.' If you want something enough, you will make it happen."