You sell what? Microfinance and health foods

This is a repost from my blog on Kiva Stories from the Field. Check out the site for blogs from other Kiva Fellows across the world.

By Rob Packer, KF10 Colombia

Sometimes context is everything. If you met someone making muesli, granola and other fibre products in San Francisco or Berlin, you might not be all that surprised. But if you take away the context of coffee culture, media types and brunch and replace it with Barranquilla, a port town with an image problem on Colombia’s Caribbean coast, things start looking different. Oh, he’s also a microfinance borrower. Not exactly what you’d expect.

A street scene in Me Quejo. An unlikely location for health foods.

Earlier in the week, I took a trip with a loan officer from FMSD to meet Gustavo in Me Quejo—incidentally I’d been looking forward to a trip to this barrio since I arrived as it means “I complain” which makes it my favourite barrio name in all Barranquilla (see here for more background). Gustavo is one of the most unique Colombians I’ve met in my months here: in a land of meat, rice and soup, he’s been a vegetarian for the past thirty years. He gave up selling products like shampoo seven years ago and used his understanding of vegetarian food to start a natural food business with little more than a casserole dish and a great idea. Years later, Gustavo’s business is still small and based in one room, and he’s found a market selling his products to vegetarian restaurants and natural food shops—I had no idea these existed in Barranquilla either. But what really set him apart for me were his ambitions to expand the brand he’s created to break into supermarket chains and to start selling his products in gyms in Barranquilla. I was struck that this was 1) an excellent idea and that it was 2) achievable if he has access to the capital required. If he achieves his dreams (and I hope he does) it would be yet another example of the interplay between formal and informal economies that characterizes so many developing countries and the juxtaposition of rich and poor that’s more marked in Latin America than other regions: it’s these differences that I find one of the most disorienting aspects of living in the developing world.

Gustavo in his kitchen.

Gustavo shows us where he makes his granola products.

As we left I took a moment to think about a bizarre intersect that I never thought I’d see: Whole Foods and microfinance. There was part of me that was stunned by the fact that a microfinance borrower was working in the health foods business, an industry often associated with overpriced snobbery. And then I realized that I was looking at things from my own cultural context and not seeing the bigger Colombian picture and realized that Gustavo was one of those microfinance entrepreneurs we all love to read about: someone with an innovative idea who only had the resources to get it off the ground with microcredit.

And at the end of the day, isn’t this what microfinance and Kiva is all about? It’s about giving these people the chance to grow their businesses.

Rob Packer is a Kiva Fellow currently working with the Fundación Mario Santo Domingo in Barranquilla, Colombia. There are borrowers from Colombia with FMSD who you can help by contributing to a loan today, and many other entrepreneurs from around the world on the Kiva site.

Echoes of violence

This is a repost from my blog on Kiva Stories from the Field. Check out the site for blogs from other Kiva Fellows across the world.

By Rob Packer, KF10 Colombia

One of the things that attracts people to the Kiva Fellowship is the chance to visit places they would never visit otherwise. Over the past three weeks with the Fundación Mario Santo Domingo (FMSD), I’ve been to barrios in Bogotá, Barranquilla and Cartagena that I would never have visited otherwise. The alegría and friendliness of Kiva borrowers normally means that this is an overwhelmingly positive experience. However, there are other kinds of visits, often to poorer areas, and it’s this kind of visit that haunts you and enrages your sense of justice in the world. Wednesday of this week was my hardest day in four months as a Kiva Fellow.

Cartagena is Colombia’s most visited city and is known for its colonial architecture, beaches and port. On my first trip to the city though, I sped past all of these to go to the city’s other barrios with loan officers from FMSD. The moment I first realized that my first visit of the afternoon would be different from the others was when Elberto, the loan officer for the area, stopped his motorbike and made sure I knew where my camera was: “Es una zona peligrosa” (“This is a dangerous area”). As he explained later, whenever he is working in the area, he only goes by car, taxi or motorbike as the area can be dangerous for strangers walking around. Incidentally, this is the only time in my three weeks in Colombia that I’ve ever felt even remotely at risk.

When we arrived at the seashore, the streets thinned out and were replaced by wooden buildings and dirt roads that characterize what Colombians refer to as barrios de invasion (squatter settlements). As we got off the motorbike, Elberto mentioned that that Teresa, the woman we were going to see, was una mujer desplazada (a displaced woman). When I asked him later, he told me that a lot of the inhabitants of this 20-year-old barrio had been displaced from the interior of the country or from the southern part of Bolívar, the department where Cartagena lies.  Colombia has one of the world’s highest populations of internally displaced people (IDPs or desplazados) with up to 4.3 million people (10% of the population) displaced by guerrilla, paramilitaries or drugs traffickers: a process that continues to this day with 2.4 million people displaced since 2002 (link, document and video in Spanish only).

Teresa is originally from San Rafael, Antioquia and was forced to leave 12 years ago. She told us that when she arrived in Cartagena, she had nothing: they’d had to leave everything behind. Teresa seemed strangely quiet and reserved compared with most Colombians I’ve met and there was something about the way she said this sentence that made me realize that she wasn’t exaggerating: her “nothing” meant literally nothing. Since arriving in Cartagena, she and her family moved from barrio to barrio before coming to Olaya four years ago and where she still lives. As she showed us her grocery shop taking up the front half of her home, she mentioned a foundation (Granitos de Paz) who constructed her house out of breeze blocks (cinder blocks), replacing the wooden structures of the area. Elberto interrupted to say that this foundation constructs basic homes at no cost and that Teresa’s is just one month old. However, he later added that some people living in the area are suspicious of their motives and don’t want their homes reconstructed because they’re afraid they’ll be taken away from them—the fear of authority runs deep.

When Teresa told me how thankful she is for what she has, it suddenly dawned on me that her new house, business, loan and hopes of sending her children to university made her one of the lucky ones. It doesn’t bear thinking about how many other desplazados don’t have these opportunities. As I put my motorcycle helmet on and we headed off, I couldn’t control the tears I’d been choking back since almost the beginning of our interview. I remember feeling overwhelmingly thankful that Teresa is able to get the help she deserves so much.

*

The next day, I went to two towns called San Jacinto and San Juan de Nepomuceno, two hours from Cartagena to visit borrowers there with César, the local loan officer originally from San Jacinto. Like a lot of rural Bolívar department, the towns were affected by Colombia’s most recent period of armed conflict in the late 90s when guerrilleros used to arrive at night. One borrower we visited told us that she planned on leaving and going to Cartagena but no longer feels scared. Another borrower happily showed me her business and told me about her three children all living in other cities of Colombia; it was only hours later that César explained to me that one of her sons was killed 13 years ago by guerrilleros and that she could only work out how long she’s been with FMSD in relation to her son’s death. César, who knew of him, could offer no explanation as to why.

Microfinance: One industry, multiple methods

This is a repost from my blog on Kiva Stories from the Field. Check out the site for blogs from other Kiva Fellows across the world.

By Rob Packer, KF10 Colombia

Microfinance is commonly seen as the exclusive territory of non-profits and non-governmental organizations (NGOs). While there are a lot of non-profits on the Kiva platform, there is also a fair number of for-profit MFIs and additionally, a lot of the non-Kiva money coming into microfinance is returns-driven (i.e. investment for profit). Whether it’s interest charged on a loan from a bank, the spread required for philanthropic financing by national or supranational governments, or the more apparent return sought by microfinance investment firms, there is an implicit profit motive in microfinance that touches all areas of the industry. Does a for-profit MFI with a strong social mission automatically cause lower levels of development because the ultimate aim of the company is profit? As is always the case in microfinance, the answer is “it depends”, but from my experience in Kyrgyzstan, I don’t see that microfinance and for-profit are mutually exclusive. In all the discussion of whether for-profit or non-profit organizations are better, there is an important point that is often overlooked. The main struggle for an MFI is not how much of a profit they make, but whether they break even.

Leonardo, barber and FMSD client - and coming soon to Kiva.

I’ve now spent two weeks with my new MFI, Barranquilla-based Fundación Mario Santo Domingo (FMSD), which is also Kiva’s first field partner in Colombia. The difference in temperature and ambience between the cold of Kyrgyzstan and the warmth of Colombia’s Caribbean coast is obvious enough, but the differences between these two MFI’s as institutions are almost equally as astounding. While Mol Bulak Finance is a for-profit institution working mainly with women in group loans, FMSD is a philanthropic foundation started by the Santo Domingo family, one of Colombia’s richest, with a microfinance department that lends primarily to individuals in the urban areas of Barranquilla, Cartagena and Bogotá. And while a large number of Kiva’s field partners have been in existence for less than a decade, FMSD will be celebrating its fiftieth year in 2010, although it hasn’t included a microfinance unit for all that time.

FMSD Client Lila Rosa, who's been with the Foundation for 12 years

Visiting Rosario, another FMSD client who has been a client for 9 years. She only moved into her shop over the last few years with help of FMSD.

From what I’ve seen over the past week, FMSD inspires an incredible amount of loyalty from its staff, a lot of whom have been with FMSD for around twenty years—a rarity in the microfinance industry. You can find a similar loyalty in terms of the clients: on a visit to meet borrowers this week, we met some who have been clients of FMSD for up to ten or fifteen years and I’ve met other borrowers who have now been registered as businesses in Barranquilla’s chamber of commerce.  It’s hard not to be impressed. At the same time, FMSD run a wide range of free vocational training programmes: while I was waiting for the bus with my Kiva Coordinator last week, a passer-by stopped to say hello to FMSD’s Kiva Coordinator—he’d taken a course as a baker at FMSD and now had a job as a baker around the corner from the Foundation. Perhaps one of the most impressive parts of FMSD’s work was part of the same visit to entrepreneurs when afterwards we went to Villas San Pablo, a housing community being built on the outskirts of Barranquilla with assistance from a number of international organizations, such as the Inter-American Development Bank, as well as the Colombian government. The scale and vision of the project is impressive: to construct a community of 20,000 homes to allow the poor from all over the department of Atlántico to have their own home for the first time. A visit to the site at the moment is a strange experience as it’s still under construction: there are lots of vacant lots and a few streets of single-storey buildings with the sound of reggaeton from a lot of the houses. The majority of the inhabitants are people who aren’t able to move out of their parents’ home for financial reasons, people who are living in rented accommodation or people from other parts of Colombia displaced by the armed conflict that needs no introduction. The houses are built with a joint loan between FMSD and the Colombian government and have been designed to be constructed using a modular method: each room of the house can be built separately depending on the family’s resources. It’s going to be interesting to see how it progresses.

A street in Villas San Pablo.

Explaining Villas San Pablo.

A resident of Villas San Pablo.

Two of the men who make the building materials for Villas San Pablo. They got a loan from FMSD to be able to contribute to building the community.

It looks like it’s going to be an interesting few months and I’m looking forward to working with Kiva’s first partner in Colombia. And with the tradition of story-telling on Colombia’s Caribbean coast ranging from Barranquilla humour past the bawdy letanías of Barranquilla’s Carnival to the magic realism of Gabriel García Márquez, I can already tell that meeting the borrowers is going to be a highlight of my time here.

Welcome to the Kiva family, Colombia!

Rob Packer is a Kiva Fellow currently working with the Fundación Mario Santo Domingo in Barranquilla, Colombia. There are borrowers from Colombia with FMSD who you can help by contributing to a loan today, and many other entrepreneurs from around the world on the Kiva site.

Ait mairik bolsun! (Eid Mubarak)

By Rob Packer, KF9 Kyrgyzstan

This is a repost from the Kiva Fellows’ Blog.

Islam in Kyrgyzstan feels different; more of a personal matter compared with other countries I’ve travelled in. While it’s probably an exaggeration when the Lonely Planet for Central Asia says that the Kyrgyz “limited it to what they could fit in their saddlebags”, there is probably some truth in the matter in a culture where kymyz, fermented mare’s milk, is a key cultural pointer and a toast with vodka is often not that far away, especially amongst the more Russified population of northern Kyrgyzstan. When you remember that the Kyrgyz are a people with a nomadic heritage who were first permanently settled under the Soviet Union’s policy of ‘militant atheism’, you might expect the relationship with religion to be a little different from the norm. (more..)

An Islamic cemetery outside Kochkor, Kyrgyzstan.

Money from Siberia (Part 1 of 3 of a Kiva Fellows’ series on Remittances)

By Rob Packer, KF9 Kyrgyzstan

This is a repost from the Kiva Fellows’ Blog and is part one of a three-part post on remittances with other posts by Meg Gray (KF9, Nicaragua) and Agnes Chu (KF9, Samoa).

In the US or Western Europe, we often think about remittances as something that people send from our home countries back to their families in Mexico, Ghana, the Philippines, Ecuador, and so on. Remittances and the hope of wealth are the one of the driving forces in all kinds of global migration, so it seems fitting that the subject of remittances is a recurring theme in the United Nations Development Program’s Human Development Report from October 2009, which this year focuses on migration and aims to “challenge our preconceptions”. While movement from the West to developing world is one side to the story of remittances, it is not the only side: remittances do not necessarily touch the “rich world” of North America or Western Europe, or they can linger below the radar and have an enormous impact on countries where people are barely aware that they have an emigrant community. The three Kiva Fellows contributing to this co-ordinated post are posted in the countries currently hosting a Kiva Fellow and where remittances make up the largest percentage of the country’s gross domestic product (data from the World Bank): Samoa (22.8% of GDP), Nicaragua (12.9% of GDP) and Kyrgyzstan (19.1% of GDP). (read more…)

Salad Daze

By Rob Packer

Kiva Fellow Initiation Test: Offal

A couple of weeks ago at work, we had some delicious salad to go with our samsy, a delicious Kyrgyz meat-filled pastry that bears quite the resemblance to the Cornish pasty. The salads were a slightly pickled shredded carrot with mushrooms or tofu. While I was passing through the supermarket after my Russian class this evening, I saw the salad section and suddenly remembered how delicious they were. I pointed at my salad of choice, mumbled some Russian (it’d been a hard class) and went on my way.

I arrived at home toying with the idea of making some pasta, but a gurgling sound and no water from the tap quickly made up my mind. The first place I went to check after that was the gas stove to see if the water was coming out of there. Instead I decided to have some lepyoshka (flat Kyrgyz bread, delicious when still warm), cheese and my salad. I’d had an enormous plate of rice for lunch, so a German-style Abendbrot seemed like good idea. I was not happy when I opened my salad, and saw that instead of tofu skin, I had a carrot and tripe salad.

I feel like a bit of a hypocrite complaining about a spot of tripe, especially after a semi-boast yesterday about my love of thousand-year eggs and durian. In my defence, I like offal slightly more than the next guy, which I why I happily chugged down the lamb bits on the top of the plov, Central Asian pilaf, at the weekend. But tripe is something I’ve never been able to get into: whenever I’ve had it before it has to have a pretty strong sauce and be hot to make me like it. The slightly spicy vinegar dressing didn’t hide the fact that I was eating a carrot and tripe salad. Nor was it hot.

Carrots and tripe

Tripe salad. Even at this distance those could be mushrooms. Caveat emptor!

When I was taking a night-time stroll to my supermarket to top up my internet credit, I decided to stop by the salad section. Sure enough, next to where my tripe salad had been, were more cartons: one was carrot and mushroom, the other was carrot and tofu. Suddenly it became clear my the woman was slightly hesitant to give me the carton I was pointing out when I picked it up.

I feel that it’s almost understood that an offal experience will be part of every Kiva Fellow’s time in the field, and I’ve been patiently waiting for mine. I just never expected it to be self-inflicted.

Verb rules and road duels

By Rob Packer, KF9 Kyrgyzstan

This is a repost from the Kiva Fellows’ Blog

A less endearing road habit is driving in the country at night, where the gentleman’s etiquette of how to deal with oncoming traffic that I’m used to, has become an updated version of the staple of the 19th-century Russian novel, the duel. (read more…)

Kyrgyzstan’s Windy City

By Rob Packer, KF9 Kyrgyzstan

This is a repost from the Kiva Fellows’ Blog

In the middle of October I spent a week away from the Bishkek office of my MFI, Mol Bulak Finance, to see microfinance in action in their Balykchy branch. Part of the training as a Kiva Fellow is to complete an online course from the United Nations Development Program on microfinance, which seemed to tell me continuously that microfinance is a low-margin, high-cost business. No matter how many times this message is drilled into me, it still comes as a shock.

The town of Balykchy sits at the start of Lake Issyk-Kul, the world’s second-largest mountain lake after Lake Titicaca. The lake is a summertime holiday Riviera and a former Soviet naval testing ground far away from the prying eyes of the West. Compared with its more visitor-friendly lakeside neighbours of resort town Chopon-Ata and trekking or skiing centre Karakol, Balykchy suffers from a bad reputation in Bishkek. Bishkek was a sea of yellow leaves at the time, but I was warned that I would need warm clothes for the cold and sunglasses for the wind. As we drove out from Bishkek, the ever-present fields and mountains became drier and when we finally left the steppes and arrived in the massive valley of Issyk-Kul, the landscape looked more and more like a mountainous desert, camels included. During my time there, I never experienced Balykchy’s gale force delights but the wind’s presence seemed to hang over the town like a dragon in the mountains.

The modern-day Silk Road just outside of Balykchy

(more…)

Добро пожаловать, граф Картошка! ジャガイモさん、いらっしゃい!Welcome Mr Potato!

By Rob Packer, KF9 Kyrgyzstan

This is a repost from the Kiva Fellows’ Blog

Inter-Cultural Exchanges in Kyrgyzstan

The words ikebana and prazdnik started spreading around the offices of Mol Bulak Finance, my MFI last week. Prazdnik was the easy part: it means holiday, festival or party in Russian, but the word ikebana was new to me. My first thought was “That word sounds a lot like the Japanese art of flower arrangement!” and then decided it didn’t really sound all that Russian, and used my limited knowledge of Kyrgyz (eki means two) to convince myself it must be Kyrgyz. When I asked I was met with shocked expressions and told it really was the Japanese word and that on Thursday flowers would be arranged, or lunch prepared.

(more…)

A Sunday outing, MFI-style

By Rob Packer, KF9 (Kyrgyzstan)

This is a repost from the Kiva Fellows’ Blog

I feel it’s almost become a cliché to write about the inspiring professionalism and overwhelming dedication of MFI staff on these pages. I’ve now been at my Kyrgyz MFI, Mol Bulak Finance, for a week and have now seen where the clichés come from: reality. As if to drive the point home, MBG’s indefatigable Credit Manager, Renat was waiting outside my apartment at 9am on a sunny, but cold October morning to visit borrowers in and around Kara-Balta, Kyrgyzstan.

The view from Bishkek

The road out of Bishkek was my first trip outside of the capital within Kyrgyzstan after my night-time journey from the airport into town. Our route out took us past Osh Bazaar, one of Bishkek’s largest, and Kyrgyzstan’s largest used car market, which is a phenomenon I hope to write about in a later blog. Along our route thousands of kilometres of flat Kazakh Steppe and West Siberian Plain crashed spectacularly into the snow-capped Toblerone blocks of the Alatau Mountains, the advance guard of the Himalayas, which rise 3500 metres within the space of 50 km. (more…)

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