“If you want to be involved in microfinance, get to the field, ” was the advice that Accion CEO Michael Schlein gave to our group of Ambassadors during training in Boston last month. Here I’ve realized the importance of getting to the campo, or countryside, where the majority of Genesis’s clients are. As microfinance institutions everywhere, especially in Latin America, adapt to a changing market and growing competition, it’s crucial that management “gets to the campo” as they form strategies and policies.
Last week I had the priveledge of acompanying Flor de Salguero and Diana Enriquez, the women who lead Servicios de Desarrollo Empresarial (SDE), into the campo for four days. Throughout the week I was inspired by their leadership which shone through their empathy for both clients and employees and through their intentional feedback practices. I was also inspired by the clients themselves as I got to know a little more about their lives and their involvement with Génesis.
Sunday morning Flor, Diana and I set out from Guatemala City on the six(ish) hour trek to Petén. It didn´t take long to realize Diana was a race driver, and I had to brace myself everytime we would fly around a mountainous bend or bounce aggressively over a camoflauged speed bump, but the three of us laughed and joked and sang the whole ride so I can´t really complain. Plus, the views were unbelievably gorgeous; Guatemala has an ever changing landscape through mountains and vallies, jungles and forests, and volcanoes and lakes.
Throughout the week the three of us attended training sessions in different villages around the region, moving from hotel to hotel every night and sometimes traveling over 6 hours a day. Flor and Diana were evaluating the training facilitators on a new training methodology called CEFE, Competency-based Economies through Formation of Enterprise. I was observing and interviewing clients and practitioners on various aspects of the training program. Most importantly, I was experiencing first-hand the work of the campo, which is quite different than urban microlending. This exposure will add validity to my recommendations to Flor and Diana over the coming weeks, as I continue to plan a proposed short and long term growth plan for SDE.
This week brought new meaning to the concept of “high transaction costs” in microfinance. Transportation costs, for example, have long been explained as a key driver of higher interest rates. When I was a Loan Officer for US-based clients at Accion East, many of my clients had the option of using our online lending platform to expedite the application process and save precious time for both Accion and the clients. (Other transaction costs certainly apply to microlending in the States, but I won´t get into that here.) Clearly, this type of technology is not an option for the clients of Génesis that live so far out in the campo where there is no running water, let alone cell phone service or internet access. The only way to get there is (precariously) by motorcycle or an agressive 4 wheel drive, and often the final stretch must be done on foot. Loan officers and training facilitators make this trek every time they visit a client, an important part of the relationship building process.
The rigorous commute and indigenous languages of the campo call for a strong group of loan officers and training facilitators, but of course the most noteworthy part is the clients themselves. Many make their living off of coffee or cardamom, commodities that are very vulnerable to market or environmental changes. For example, cardomom is experiencing a pricing crisis, leaving its farmers in a tough economical spot. Génesis is helping with this crisis in two main ways: 1) through specific training to combat the thrips pests that are attacking the crop, and 2) a new loan product that will help current borrowers make it until the next harvest.
At the end of every training, Flor addressed the group of clients with words of encouragement and a call for questions. She commented to me multiple times the importance of learning from the clients, and of basing the future of SDE (and Génesis as a whole) on the needs of its client base. As Michael advised, it´s not enough to have worked in the industry for years or to have high pedigrees or a passionate heart. To effectively innovate, management needs to jump in a four wheel drive, throw on some rain boots, and hear from the clients themselves.