|
|
- Background
[2007 - 2009]
Having begun Arriba Ya based on a successful Grameen style community
economic development model, in 2008 we were strongly encouraged
[partly due to our initial success and it having been reported
in flattering terms in the national - and the near histerrical
grab for our clients by one or two perhaps over-funded-under-performing
microfinance NGOs] encouraged to evolve away from organising small
communities of poor women in Trujillo's most desolate barrios;
away from preparing and funding the members of each community
in the hope that the project would become peopled by an ever growing,
succeeding body of productive women: each earning her own living
and repaying her loan to ArribaYa - with interest rates adequate
to sustain the project: so we could continue funding more and
more impoverished women. All of these women we would eventually
lead out of the informal sector of Peru's economy and into the
formal sector.
Our
Results
We have continued to succeeded in getting most of the women we
accepted into ArribaYa productive enough to sustain themselves
and their children economically. It also contimnues to be evident
that we, in the early years of ArribaYa, failed to build communities
that were strong enough to withstand the temptations and challenges
which would be visited upon the ArribaYa women as soon as the
project became known outside of Trujillo. Temptations such as
being offered additional funding in excess of their needs by Lima
based NGOs. The challenge of having to repay two or three sets
of loans when only the ArribaYa funds had been invested in their
business, the rest usually went into their homes and other non
productive necessities. Paying off all of their loans on the earnings
from their micro continued to porve impossible, so they paid none
- or at least did not repay our project.
We were glad for the success we brought to the women in the programme,
but could not justify continuing putting women into business with
our funding, and not have the women repay the funding. [Note:
During ArribaYa's first year we donated the capital to pay the
staff and loan to the women. During the second year friends in
the Netherlands contributed the funds - led by Bart, with Ina
being the largest contributor.] What to do?
"Necessity - mother of invention".
It seemed we needed to 'think outside the box'.
After experimenting with a couple variations on the Grameen model
- such as trying to work only with existing communities - we hit
on a plan which, if it worked, could relieve ArribaYa from having
to fund the micro startups: do all the preparation work then get
someone else to put up the micro-financing If it succeeded we
would also be relieved of having to act as debt collectors.
Our own funds (and those contributed by our associated friends)
would be used to pay for recruiting, preparing and training ArribaYa
women, lead them through the steps which culminate in making their
business plan. We would then present our well prepared women to
a bank, help them open an account, apply for credit and like waving
a wand we would have transporting our impoverished women from
unproductive members of the informal economy to self employed
productive members of the formal economy.
Result
In spite of our best efforts no bank would give our enthusiastic
women a line of credit - unless we guaranteed it.
Even though we did not set out to operate the ArribaYa project
as it is now functioning, and we do not claim any genius insight
for ourselves by which we streamline our original approach - the
truth is we were forced to do it: it was either try something
radically different or else fail. We tried something new and now
we are very happy with the results we are now getting. Our new
method is this.
Over the past year, counting on the fact that we have becoming
somewhat known and having a not bad reputation, we managed to
persuade a savings bank to work with us. We now prepare the women
just as before. We then, instead of funding them ourselves, present
each , along with our recommendation to the bank. And the bank
accepts most of them as their clients. This means the women in
our programme now go straight into the formal economy of their
country: with their own bank account and line of credit. We still
put the women through the preparation steps, and it takes just
as long as before to prepare them, get them used the discipline
required, you know what the steps are - and prepare their business
plan. The banks and the women are very content so far. And it
gets around the great hurdle of having to form communities among
women who were not inclined to abide by the requirements of being
in a little community. Our investment is the salaries of the three
people who work in the project and their daily transport.(And
we still have a collector going after the women from the past
- but we only do that so as not to accept that we will let the
women fail to repay their debt - for their sakes not ours, for
us it is almost all a write off, as the cost of the collector
and transport are usually more than we collect).- We have taken
Charo and Pedro off collecting because we want them to only be
known in the community for the positive activities of preparing
our women to be accepted by the little banks. Our monthly expenses
are slightly higher than before, but we do not have any risk,
not have to give out any money. We achieve better results for
the women. As a result we now intend to remain a social project
(hopefully continuing to grow). We are therefore not likely to
become a large Micro Credit NGO and certainly not a bank. We do
not mind this at all because our aim was always to find the best
result for the women we were helping - all within the means at
our disposal. It seems we are achieving this. Now to grow the
model.
|
