Thursday, January 5, 2012

A change of subject

Regular readers might be aware of my family's interest in KIVA, which describes itself as a:
"non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world. Learn more about how it works."
Occasionally, Kiva volunteers relate personal experiences associated with the organization's activities. We received one today that I think is worth passing on since it effectively describes the workings of one field partner in Bolivia. The update comes from Eric Rindal who says that before volunteering as a Kiva Fellow in Sierra Leone and Bolivia, he lived in Santa Barbara, California.
This is an update on your loan to Muchachas Emprendedoras Group in Bolivia.

Dear Emprender Lender

Greetings from La Paz, Bolivia. I arrived as a Kiva Fellow to work with Kiva partner microfinance institution Emprender. My work with Emprender focused on assisting with improving their processes from interviewing the Kiva Borrowers to posting loans onto

Emprender, which means Undertake in Spanish, tailors their products toward the economically active poor in La Paz, Cochabamba, and Santa Cruz, which are the three largest towns in the country. Focused on promoting first time business startups and solidarity lending, Emprender offers their clients the ability to take the first step toward economic activity, which is so vital to their livelihood. ...Emprender operates fourteen branch offices from the urban, semi-urban, and rural areas to reach the gamut of clients who need their services.

Non-Financial Services

What I found impressive while at Emprender was their dedication to non-financial services. Two medical doctors work fulltime in two Emprender branch offices. From my experience as a Kiva Fellow I have seen [that] non-financial services offered are just as important [as loans]. Medical care is available in Bolivia, but a large divide exists surrounding cost and care between public and private hospitals. Emprender's Mission is to "improve their [client's] quality of life," and providing free medical consultations for clients and non-clients is a key factor in achieving that mission. The doctors provide in-house medical consultations, which includes a blood pressure check, ear/nose/throat check, and vital organ check – all of which are free of charge. The doctors also provide medical trainings to group loan clients. These group meetings cover issues related to women's health, breast cancer, nutrition, vaccination, anti-parasite medication, contraception, and family planning. In 2010 Emprender provided over 900 medical exams and provided around 50 training sessions each month to Emprender clients.

Next year Emprender would like to expand their medical operations to another branch office in a lower income area outside of La Paz. One of the main ways that Emprender can afford to offer free health care, to both clients and non-clients, is by using the interest saved from Kiva loans (*How Kiva Works: Lenders receive repayment of their $25 loan, and the MFI receives the interest paid from the loan. This interest is a great benefit to the MFI and is used to fund other projects at the MFI or lower MFI interest rates, etc.). Part of the success and expansion of the medical program depends on the collected interest Emprender receives from these Kiva loans.

Story of a Borrower

I would like to share with you a client who I was able to meet and interview. His name is Hugo, and he is a puzzle maker in El Alto, Bolivia. With his Kiva loan he purchased a skill saw to cut the intricate shapes of children's puzzles. Previously he was cutting all the shapes by hand using a small tricky saw. It would take him hours to complete just one puzzle, but now he can cut multiple puzzles in those hours. This loan essentially transformed his business from a small-time production to a main supplier for shops in El Alto. Hugo's dream is to purchase another skill saw and hire an employee (who would become his apprentice). He says there are plenty of people who want to work in his area and there is also high demand for his puzzles. Not only did his loan from Emprender boost his production, but it also got the momentum going in his business toward the growth he previously thought was impossible.

So, why fund loans through Emprender? With most clients not being able to take loans from traditional banks or financial institutions, due to high collateral requirements and credit worthiness, microfinance institutions are a significant part to the sustainability of businesses. Emprender is able to offer their clients an alternative to large banks and personally help their clients mitigate over-indebtedness through teaching programs on how to live a financially healthy life.

A loan made to an Emprender client ensures transparency and a dedication to the wellbeing of the client. Kiva Lenders are not only funding a client, but also (through the interest collected by Emprender) funding the non-financial services Emprender offers. One of which includes a soccer program for very low-income boys and girls in La Paz and El Alto. Loans also give borrowers the opportunity to take their business and life into their own hands and many economic barriers are lifted.

Thank you again for you loans to Emprender clients. I hope that you continue to lend through Emprender and to Kiva entrepreneurs in the future!

Eric Rindal
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