Accion Ambassadors Blog

Experience the power of microfinance


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Microfinance in Action

Catalina and I were lucky enough to visit Swadhaar’s Chembur branch last week and catch a group loan disbursement in action.  Four female microentrepreneurs signed for their first loan and we captured it on video. As you’ll see, the women got dressed up to come to the modest Chembur office for a momentous day in the course of their microenterprise.

Below watch a short video of one of the women signing for her loan. Just like loans in the US she has to sign and initial several pages. Right before she signed the Swadhaar Administrative Assistant thoroughly explained the terms of the loan, so the clients understand exactly what they are getting into. However, that part was all explained in Hindi, so I edited it out for our mainly English speaking audience. In the interest of full transparency, feel free to email me if you’re interested in seeing the full video.

Unlike Swadhaar’s Individual Business Loans, their Joint Liability Group Loan product is exclusively for female borrowers. These loans range from Rs. 6,000 – 34,000 or roughly USD 125 – 725. That seemingly small amount can truly make a difference in the lives of women living and working in the slums of Mumbai. Access to credit allows a woman to get ahead by buying in bulk or having products delivered rather than wasting a day traveling to the market to purchase raw materials. Check out the video below to see these four successful businesswomen journey into the exciting world of credit and banking thanks to Swadhaar and ACCION.

The concept of microfinance can be a little difficult to grasp at times, so I hope these videos made it a bit more tangible.

Hope you enjoyed the videos,

Mariel


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How to make Appam


Appam is a common daily food in Kerala which is usually eaten for breakfast or dinner. It is a type of bread made from rice batter on a stone griddle.

Sreelatha, runs a flour mill where they make the rice flour that is used to make appam. She established the business 4 years ago after having learnt the process whilst working elsewhere. Her family had needed to boost their income and they felt that they had the capacity to set up on their own. But things have not been easy for Sreelatha. Unfortunately she suffers from chronic allergies and so cannot work consistently. The business is so dependent on her that in 2008 when she was hospitalised for a year, they had to close down. They resumed operations last year and she now has excellent support from her husband and 3 children and has also hired 2 employees.

Sreelatha felt that by undertaking ACCION’s Dialogue on Business training it would help her improve her management skills as well as learn how to recruit staff effectively. Her business is now flourishing and unless she adds to her team she will not be able to meet the growing demand for her product. As a result of meeting Sreelatha, the staff of Muthoot, the bank where she most recently took out a 25,000 Rupee loan, were so impressed by the quality of her rice flour that they now purchase it for their own use. The Muthoot Hotel has even requested Sreelatha to start producing a specific type of flour to be used in its restaurants.

The training has boosted Sreelatha’s confidence and re-affirmed the need for her to expand the business. Another hurdle she has realised she has to cross is how to transport the rice. At present she is dependent on using auto-rickshaws and buses. However carrying 20kg of rice from her house to the bus stop and then travelling over an hour to her destination will not be feasible for much longer so she is making plans to purchase a vehicle.

Despite her health issues Sreelatha remains optimistic and is always on the look out for new business ideas. Since attending the training she has decided to set up a side-business of making banana chips at home.

Appam Recipe

Ingredients

Raw rice – 2 cups
Urad daal-1/4 cup
Boiled rice – 1cup
Coconut Milk – 1 cup
Sugar – 2 tbsp
Salt – As required
Water – 1cup

Preparation• Soak raw rice and Urad dall for 4 hours.
• Put soaked rice and urad dall in a mixer and grind till smooth paste.
• Add Coconut milk, salt and sugar.
• Mix well by hand.
• Keep the mixture closed to ferment for 7 hours in a warm place
• Heat the Appa Chatti (Cast iron pan with deep bottom).
• Wipe the vessel with oiled cloth.
• Pour in the appam mixture.
• Lift off the stove and swirl the vessel.
• Pour oil round the appam.
• Close with lid for 5 minutes.
• Gently remove the appam from the vessel.


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Crédito Mujer at San Martin Texmelucan

Compartamos Banco offers its client four different types of loans: Women Credit, Merchant Credit, Grow your Business Credit and Home Improvement Credit. The predominant majority of the loans are Crédito Mujer -loans (Women Credit):  a credit granted personally to women in groups from 12 to 50 members, with solidarity guarantee, for investment in their business. All clients with Crédito Mujer receive also a free life insurance and if they wish, they may purchase additional modules to increase their insured amount.

Every  Crédito Mujer-group has a president and a treasurer who are responsible for running  the weekly reembolso (reimbursement) meetings. Compartamos loan officer is present in the meeting in a supervisory role. All the members of the group bring in their weekly installment and additionally a small saving (the amount is decided within the group).

Last week we travelled to a small town of San Martin Texmelucan approximately 2 hours south-east from Mexico City. During the day we followed one of the loan officers through the rambling streets and narrow dirt-roads to the client meetings around the town. We met three different groups – all of them running their meetings with efficiency and routine. Here are a couple of women posing with their new Compartamos aprons – ready to return back to work after the meeting.


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Looking Through Indian Eyes

By Catalina Sicard

(Spanish Version Below)

Visit India confronts people and offers them to look with different eyes the meaning of two words: Microfinance and Poverty. It is important to look through the eyes of inhabitants to discover why bet on their progress through microfinance really worth it.

Here are women who inspire more privileged women (related to economic resources) because they are fighters, optimistic and happy. They have had the opportunity to access to microfinance institutions such as Swadhaar. These opportunities have allowed them to unleash their full potential, to stabilize their finances and increase the likelihood that their children grow up educated and healthy.

I have the privilege of transmit this life perception due that I have been sent to Swadhaar, a microfinance institution based in Mumbai and which has a close relationship with ACCION as a partner.

GL Clients

Chembur Group Loans Clients

As the first activity during my trip, I had the opportunity to meet Chembur Branch. The area can be described as a place full of contrasts, smells and sensations and which is inhabited by people with clear financial difficulties. There live Asha Shingare, Shobha Gretkar and Manojkumar Sharma.

They are a group of women who know each other and who have managed to succeed thanks to the loans granted by Swadhaar.

GL Clients

Asha Shingare

She is Asha Shingare, who has been selling dry fish and coconuts for the last 4 years. Being a mom motivates her to succeed and all your dreams are going around their two children. She wants to help them to complete their education and then having great jobs.

Due to the loans received from Swadhaar, She was able to pay college fees for her kids, to buy different types of fish to offer more variety in their business and also to prepaid higher interest rates loans.

Shobba

Shobba Gretkar

Shobba

Shobba Gretkar (Tailoring)

By meeting Shobba Gretkar, I understand that despite difficulties, an Indian woman is willing to move forward with her talent. There is a hope feeling in Shobba and I say that because I perceived once she said “hi” and then she invited us to her house. By the way, I must say she loves her home. She keeps it clean and tidy as well as their attire. I’m very glad to have met this mother dedicated to tailoring business. She also proudly showed us one of her creations. (I thought it was not the right time to do it but I had the intention to buy). Thanks to the loans she received was able to grown up her business and help her family.

GL Clients

Manojkumar Sharma

As many women in Mumbai, Manojkumar Sharma is a homemaid. She speaks a different dialect that it’s not Hindi and I noticed that she is also proud of what she does. He had a chance to improve her house and to give education to their children through access to credits in Swadhaar.

This is my first impression of the impact that microfinance can makes to India Poverty. I can see happy and optimistic women because they have total confidence that they are moving forward.

Until next time…

Visitar la India confronta a las personas y les propone mirar con otros ojos el significado de 2 palabras: Microfinanzas y Pobreza. Es importante mirar a través de los ojos de sus habitantes para descubrir el porque apostar por su progreso a través de las microfinanzas vale tanto la pena.

En la India, existen mujeres que inspiran a otros mas privilegiados con recursos económicos ya que son luchadoras, optimistas y felices. Han tenido la oportunidad de acceder a oportunidades que instituciones microfinancieras como Swadhaar les ofrece. Estas oportunidades les han permitido liberar todo su potencial, estabilizar sus finanzas e incrementar la posibilidad de que sus hijos crezcan educados y sanos.

Tengo el privilegio de transmitir esta percepción de vida al ser enviada a Swadhaar, una institución microfinanciera ubicada en Mumbai y la cual tiene una estrecha relación con ACCION como partner.

Como primera actividad durante mi viaje tuve la oportunidad de conocer la agencia de Chembur. La zona puede describirse como un lugar lleno de contrastes, aromas, sabores y donde habitan personas con claras dificultades económicas. Es allí donde habitan Asha Shingare, Shobha Gretkar y Manojkumar Sharma.

Ellas son un grupo de mujeres que se conocen entre sí y que han sabido salir adelante gracias a los préstamos otorgados por Swadhaar.

Ella es Asha Shingare, quien se dedica a vender pescado crudo y cocos desde hace 4 años. Ser madre es lo que la impulsa a salir adelante y todos sus sueños giran en torno a sus 2 hijos. Ella quiere verlos terminar sus estudios y con trabajos dignos para ellos.

Gracias a los préstamos que ha recibido de Swadhaar, ha podido pagar las matriculas de sus hijos, comprar diferentes tipos de pescado para ofrecer más variedad en su negocio y ha podido pagar préstamos anteriores que exigían altos intereses.

Al conocer a Shobba Gretkar, pude comprender a que a pesar de las adversidades, la mujer en la India es una mujer dispuesta a salir adelante gracias a su talento. La mirada de Shobba refleja esperanza y lo digo porque fue lo que percibí tan solo cuando me saludó e invitó a pasar a su casa. Por cierto, debo decir ella cuida mucho su hogar, lo mantiene limpio y arreglado así como su atuendo. Me alegró mucho conocer a esta madre y empresaria dedicada a la modistería. Nos mostró con mucho orgullo una de sus creaciones. (Pensé que no era el momento apropiado para hacerlo pero tuve la intención de comprar). Gracias a los préstamos que recibe ha podido sacar adelante su negocio y a su familia.

Manojkumar Sharma como muchas mujeres en Mumbai tiene como oficio arreglar casas. Habla un dialecto diferente al Hindi y noté que también es una mujer orgullosa con lo que hace. Tuvo la oportunidad de arreglar su propia casa y dar educación a sus hijos gracias al acceso a los créditos en Swadhaar.

Esta es mi primera impresión del impacto que las Microfinanzas pueden ejercer en la pobreza en la India. Se ven caras felices y optimistas porque tienen total confianza en que están saliendo adelante.

Hasta una próxima vez…

Cata Sicard


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¡Ikatú! = “Yes, we can!” (A new proposition on how to understand and measure poverty)

The Fundación Paraguaya appreciates thinking outside the box, which in turn makes me appreciate the Fundación. Take their vanguard project Ikatu, for example. The mission of this endeavor is to analyze the multifaceted reasons that contribute to about 60% of the Paraguayan population to live in poverty[1]. Looking at income and purchasing power parity to describe a person living in poverty is not enough to address the problem. This kind of approach simplifies the truth about life and existence and as most of us realize as we mature: life just is not that simple.

Martin Burt, Executive Director of the Fundación Paraguay, introduced Ikatu as a project to understand poverty as it exists in Paraguay. The hopes are to be aware of what characteristics (vital behaviors) differ between their clients coming from different social classes. That way the Fundación could see how to improve their services to their clients, if poverty is more a question of access to services or the quality of services; etc.

Martin Burt presents Ikatu

In order to address this intricate and complex issue, Ikatu’s method is to divide and analyze 12 dimensions using 50 indicators. The dimensions include:

  1. Income and employment
  2. Health and environment
  3. Housing and infrastructure
  4. Education and Culture
  5. Organization and Participation
  6. Self and Motivation

Since poverty does not only have to with external factors, Ikatu also incorporates internalized, individual, subjective, and social factors into solving the equation. Here, the Fundacion uses Ken Wilber’s “All Quadrants All Levels” (AQAL) diagram to interpret their 12 dimensions and 50 indicators.

  1. Personal Intention
  2. Group culture
  3. The system
  4. The behavior.

Ikatu is in its beginning phases, having analyzed at this point 6 different women’s committees with each consisting of 15-20 women… With the first stages of the pilot phase finished (analyzing the level of poverty of these women using this model), the next steps will include: understanding on what level of poverty their clients are (and maybe even their employees) of the Fundación using AQAL! Ambitious, but they are well on their way to continue developing Ikatu to its fullest potential.


[1] BBC News, Paraguay Country Profile: http://news.bbc.co.uk/2/hi/americas/country_profiles/1222081.stm


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The Entrepreneurial Indian Tailor

As you drive through the streets of Vijayanagar, a colourful residential area in north-west Bangalore, the smell of beef carcasses hits you. This is a Muslim area where a number of women have established businesses and expanded them by taking small loans from Grameen Koota, a microfinance institution (MFI). ACCION has worked with Grameen  Koota  by providing financial literacy training to some of their clients. We met with Mahmooda who runs Noore Fashion, a tailoring shop, to speak to her about how ACCION’s training in self management and cash management has helped her run her business more effectively.

Mahmooda is 45 years old and now employs 7 people including her husband and 2 sons. Not only does she sew sari blouses, suits and dresses but she has also now established a small factory to make bags. Her bags are sent to large cities such as Chennai where she sells over 500 bags a month.

She decided to participate in the training following her daughter’s wedding. She found herself with more time on her hands and her husband encouraged her to invest more time in growing her business. For her, the training was most useful in helping her to manage her time and prioritise, both at work and home. She was also able to pass on these skills to her sons who run her factory and as a result have implemented better processes there. Unfortunately the downside of her spending 3 days at training was that, in her absence, her workers would slack off. She then had to pay them all overtime so that they could finish the piled up orders. Despite these additional costs she still felt the training was worthwhile as she is now far more productive in her day. She has also improved her communication skills and is now better at discussing different fashion designs with her customers to encourage them to order different styles. Her record book was particularly impressive (as you can see below); every client’s order specifications are recorded in English with a sample of the material they will be using. She said that since establishing this system she hasn’t confused a single order!


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Compartamos Banco, Mexico City

I will be contributing to the blog from Mexico City where I have the privilege to observe the functions of Compartamos Banco. I am stationed at the headquarters of the bank on Insurgentes, one of the busiest streets in the city. Heading out to the field to collect the client stories will offer a good contrast to the city life since most of the clients are groups of women living in rural areas.

Compartamos Banco has had quite an interesting path since its foundation in 1990 starting as an NGO and growing over the years into the largest microfinance bank in Latin America. Today the bank serves 1,625, 151 clients, 98% of them women entrepreneurs.

The first days at the bank have been very interesting learning about the different products and seeing how the company philosophy is implemented into every-day practices. It’s impressive to see that despite the growth and success Compartamos Banco has stayed loyal to its original principles to serve the person and to create social, economic and human value.


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Visit to a “Comité de Mujeres” in Luque

Earlier this week along with the other ACCION Ambassadors we went to visit a women’s group not far from Asunciòn. Arriving in the city of Luque you immediately feel the pride of its inhabitants, as the loan officer accompanying us pointed out, often referring to their city as the “Republic of Luque”. After a bumpy ride on the local bus (naturally all blue and yellow – the city colors) we arrived in the neighborhood of Itapuami where the local women committee called Kuña Guapa – which in Guarani means “working women” – was waiting for us. Finally we were completely immersed in to the paraguayan countryside’s atmosphere. The en plain air meeting was surrounded by chickens, cows, dogs, pigs and by children playing soccer. The meeting, called “renovacion”, is a very important moment for the life of the group: it’s held every four months and it’s the moment when all the members discuss their problems, elect the president and treasurer, decide whether to continue with the next loan, accept new members, and most importantly, decide on the amount of the next loan.

The meeting was very informal and although some of the ladies were talking in a mixture of Spanish and Guarani (the local language spoken by 90% of the population) we were able to understand their many jokes.

While Mercedes, the loan officer, was busy with the paperwork we were able to meet five señoras. They told us about their work, their experience of forming a group and the role the loan from ACCION International’s partner, the Fundación Paraguaya, has in changing their lives and that of their families.


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Fundación Paraguaya, an innovative microfinance institution

Fundación Paraguaya is considered throughout the microfinance industry as an innovative institution in its sector, aiming to alleviate poverty through a number of methods. The primary approach is to give low-income people, especially women, the necessary tools to pull themselves out of poverty, namely through small business and agriculture loans. These loans enable the clients to increase productivity so as to eventually enlarge their business and profits. For many of the clients the generated capital (including obligatory savings) is crucial to family investments, such as the education of children and health. Entrepreneurial education accompanies the loans to help with the development of the client’s businesses. The 21 rural and urban branches throughout the country allow for the broad reach of the services.
 

But the Fundación’s services extend to so much more than just small business loans. One of the ways in which the foundation is distinguished from other microfinance institutions is through its programmes for children. Three “escuelas agrícolas” (agricultural schools) have been established in rural settings to teach low-income teenagers organic agricultural practices, hotel and tourism management, and business skills in order to give them the opportunity to thrive in these activities. Two of the schools are self-sustainable, whereas the third is only just opening and will be self-sufficient in five years. This model of education has been replicated so far in 27 other countries.

The Fundación's Luque branch

 

ACCION’s partner also organizes workshops for children in order to teach them the importance of savings. The curriculum includes 10 workshops where the children engage in activities such as games, music, and creative arts (such as making piggy banks) to make them understand why they should save. At the end of the course the students receive certificates of completion, giving them a sense of accomplishment. This year, 6,000 children will be attending these workshops.

These are a mere few of the many services that Fundación Paraguaya offers. Over the next few months, we will provide updates with our experiences and more detailed information on these fantastic services!


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Empowering Indian women entrepreneurs with financial literacy skills

I am posting from Bangalore, India where I am working with ACCION Technical Advisors on their Client Education training programmes. Today I visited one of the Financial Literacy workshops that was being conducted at Sanghamithra, a Bangalore based microfinance institution (MFI) that provides financial services to the poor in both rural and urban areas. Sixteen branch managers received training on how to train loan officers who in turn will train up to 2000 female entrepreneurs on ways to develop strategies to help mitigate lifecycle risks, smooth household income and consumption levels and ultimately improve their general wellbeing. These entrepreneurs are encouraged to increase their savings and optimise their assets to prevent over-indebtedness.

Through this training the MFI is able to strengthen the relationship with its clients and the client is able to have a greater understanding of financial and management practices and thus make more informed decisions.

The training was fun and interactive and used local examples such as how to save for your daughter’s wedding. The women are therefore able to understand in a practical way how better financial management can improve their lives.

In this video clip you can see how Subha, the trainer is explaining how a woman running a tea shop should manage her finances.

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