Microfinance

Microfinance takes to the streets


With an update on continuing developments in Microfinance, here's Jack!

Just before Christmas break, we wrapped up MPI Ecuador’s first small business course. Our final class will stand out as one of my favorite moments of the past 7 months. Each of the students shared their feelings as entrepreneurs and how intimately proud they have been of their work of running their own businesses. Even better, our students discussed in detail how our course motivated them to make some concrete improvements to their businesses. The final moments of this class gave me a convicting reaffirmation of the MPI’s capacity to truly empower others.

Several weeks ago, we brought on a fantastic new addition to the MPI team: Carlos Rodriguez, a finance student from Quito, is now helping out at our centro and is helping us start an exciting new element of our Business Development program. Together, Carlos and I are now providing consulting services to several businesses in our area. This past Saturday we worked with our first two clients.

We started in Sangolquí working with a small business that sells feed and other supplies for livestock and pets. This family-owned business demonstrated to us that they have had no shortage of clientele, but they have been struggling to make income cover their costs. Carlos and I are currently in the process of helping them re-organize their inventory system so they can get a better grasp of their daily and monthly finances.

After some time in Sangolquí we went back to Rumiloma to work with a small group of women who manage their own street-food stand. Every Saturday, these women sell plates of barbeque chicken and roasted potatoes. We made a brief summary of their finances, and discovered that despite their hard work, their chicken dishes have been too costly to turn a profit. After comparing their expenses from cooking up barbeque chicken with what they would be earning if they switched to salchipapas (french fries and hot dogs, an extremely common street-food option), they would be making significantly more money. These women were excited, albeit flabbergasted, about the prospect of finally making some money on their Saturday afternoons.

With a stimulating and successful day behind us, Carlos and I are thrilled with the potential impact we can have by personally working with businesses in the area. It’s amazing what a calculator and some common sense can do to completely jump-start someone’s livelihood. 

Survey Says...

This week's blog comes from Chet Polson, our resident e-card sender for any major and minor holiday, petty cash administrator, and most of all, the only person who has given us his guest blog on time (even early!) every single time he's scheduled. For all of those reasons and many more, WE LOVE YOU CHET.

"Ahoy 'Scrubs' Fans,

All of our first courses for the quarter are winding down, but rather than reflect on our first round of classes I am going to fill you in on something a bit more timeless: microfinance. Erik and I set a lot of big goals for the quarter (including starting to shadow with EPV and getting ready to teach the small business class we were trained for in the fall) but one of our most interesting goals is trying to survey the small business climate in the communities we work with. Now I can hear your eye-muscles contract as you are thinking, “Why on Earth would they want to SURVEY the place?”

Well sure, we already have SOCAT, the large community survey that was conducted two years ago. But SOCAT holds a snapshot of community assets (like skills) and areas where there is interest for possible growth. We are interested in a more robust picture of current business practices to get an idea of how small business is conducted currently and for possible ways to improve it. Right now, we are most interested in how businesses get what they are selling. Let me illustrate our interest with an example.

While there are many tiendas in Rumiloma, there is one I visit frequently about a block from the bus stop on the way into the Centro. I pop in and try to buy a 20 cent, glass bottle, returnable Coke before class when the mood strikes me (it strikes frequently). However, when the owner happens to be out of Coke, it will literally take her weeks to restock. I would probably buy a whole palette’s worth of Coke in the time it takes to restock, so she is losing out on a profit. During these “times of thirst” she literally has to tell me every time I walk in “Oh, Tuesday,” or whatever the next random day may be, so she knows she is out and someone wants to buy one. Many of the other tiendas don’t even sell coke in this size bottle.

This is the kind of example that makes Erik and I want to know more about overall current business practices than just anecdotal evidence. If our assumptions hold, there might be room for business cooperatives. To stick with the Coke example, maybe it would be best for all the tiendas in the area to place one big order directly with Coke, have it delivered weekly, and then just split up. But the honest answer is we just don’t know enough about how businesses work where we are, which is why we need to start with a survey.

We put some time into crafting this survey, and in one page, it covers a lot of areas of possible interest. We ask about business name (a basic question, but useful for advertising), number of employees, where they get their supplies, accounting procedures, and current loans and plans for future growth. The goal is to survey every business in the area: every tienda, every furniture maker, every welder, every internet café. Our official goal is to survey 50 businesses by the end of the quarter, and while we plan to do that, we very well could be surveying for the next several months. Erik and I will be administering the surveys orally to business owners in the area, so it will be a good chance to practice my Spanish and meet some community members who may not have visited our program space just yet. Hopefully by the end of the quarter we will have a big enough sample to see some general trends and have the ability to increase the business capital in the area in some form.

I’d attach a copy of the official survey as well, but I’m sure I am already over my word limit.

Song of the Blog: “Voice of the Voiceless,” by Rage Against the Machine "


What Chet does when he isn't microfinance-ing or teaching

- Jackie

Part 2: Business Class...in Spanish...

"...We had to act out the four different teaching styles in Spanish the first day (Erik and I actually did the best out of everyone, but we failed that exercise as a class pretty hard). The second day began with an 80 question oral quiz to determine what learning style we had (I’m Teórico Reflexivo, Erik is the complete opposite. This was so not-surprising it was funny). On Wednesday Erik and I had to teach a 1.5 hour exercise about business organization to a class of college students. On Friday we had to analyze a small factory and recommend efficiency upgrades. My plan beat Erik’s by a country mile (this is a sore subject with him; if he brings it up simply ask him why he created such terrible indoor plumbing problems). We were expected to give full feedback after every exercise (retroalimentación, one of my new favorite Spanish words). In short, the amount of Spanish the class demanded was challenging and tiring. I know a lot more Spanish now.


But was the class worth it? I certainly think so (did I mention my diploma?). But it brings some tangible benefits to our microfinance program. Erik and I have the basic outline to teach a 40 hour course. We are currently working on preparing a complete manual (in both English and Spanish) so PDs in the future who want to offer small business courses do not have to go through the same certification. Being able to offer the class by ourselves allows us to teach at a more accessible schedule for the community; perhaps every Saturday for two months rather than every “morning” for two weeks (which is hard to do if you are employed). Personally, my Spanish is better and I am more confident using it. If I can bumble through teaching a class to college kids I can totally bumble through a conversation with some parents at the library. Also, more trivial tasks seem less menacing to me now. To put it simply, we have the skills and information to teach an entire class that was not possible to teach before.


And our journey still isn’t done. Erik and I now have what I am referring to as “Continuing Education.” At the end of the course, one of the things our instructors stressed was getting more practice with the teaching techniques, more practice leading the class, and more projects to try. We have already been to one class and will hopefully go to one a week until at least Snowflake break.


And that’s the haps with team Microfinance.

Chao,

Chet


Song of the Blog: “Jefe” by Daddy Yankee"


Thanks Chet for filling us in! Stay tuned for a more eh, regular blogging session this week (we promise, especially since we're all heading to various countries next week for dia de gracias... more on that later...)


-Jackie

Part 1: Business Class... in Spanish...

(Today is Part 1 of this week's Guest Blog from Mr. Chet Polson, king of garbage take-out, peanut butter and honey sandwiches, and incessant reader of the mummy book to Selena - imagine Chet semi-yelling, "UNAAA MOMIAAAA!" roughly 50 times per day in the library and you've got a pretty good idea of the mummy book's plot. Chet recently completed a small business course, along with microfinance partner-in-crime, Erik Swanson. Here's what Chet had to say about the course... Enjoy! Look out for Part 2 tomorrow!)

Blog-writer side note: sorry for the on-and-off blogging around here... these power outages/internet failures make blog writing (and showering) a fly-by-the-seat-of-your-pants type thing.

"It has been a while since I last checked in. Too much has gone on in the interval to fully describe, but there is one recent occurrence that sticks out when I think about everything I want to write about (other than my current attempt to grow a mustache). Erik and I (team Microfinance) are now CERTIFIED to TRAIN small business class INSTRUCTORS here in Ecuador.

Sounds pretty cool right? Well it is; I have my certificate/diploma/licensure propped up on my bookshelf. “But what is this certification? Where did it come from? Why was it more than a waste of time? Do you have any good stories from the class?”—Those are all good questions imaginary readers, so let me try to fill you in.

This was put on through CIDE (Centro de Innovación y Desarrollo Empreserial), a section of ESPE (Escuela Politécnica del Ejército), our local military polytechnic institute. Dunc and Eliah put on/attended a small business class through them last year, but due to the rather large time commitment this class wasn’t as accessible to the communities we work in as we’d like them to be. Erik and I underwent this training to become capable to teach these very same courses on our own in the community. After much discussion all around, we decided on the certification to train instructors rather than simply attending the basic small business class and taking good notes in order to seem more qualified to put on a class in the community (and also to get a better handle on the information). As an important side note, we were able to pay the fees for this class with some of the funds I have raised over my initial obligation; so thanks donors, for helping bring small business classes to Rumiloma and the surrounding area.

This class had its fair share of difficulties getting off the ground. We initially met with CIDE to talk about this in July. We were told to check back September first. After several more meetings about what course we wanted to take, costs, and students, we set a date for the second week of October. This fell through. We set a new date for the last week of October. We got final confirmation and a large supply list Friday morning before class was to begin the following Monday, which made for a busy weekend.

This class was tough, readers. The material was straightforward, but getting through the class was quite difficult. It was a 25-hour certification over the course of the week: we had class from 8am-1pm Monday-Friday. We then had to roll straight on into programs at the library (which got sequentially harder as the days went on) making for 12-hour work days (which was a "good" experience). We had to be out the door around 7:15 to complete our mile walk to the puente, fight the morning commuters on the bus, and be sitting in front of our classroom by 8am. The class was also completely taught in Spanish (Surprise!). This wasn't exactly to punish us, in fact, most of my notes are in Spanish, which is helpful, but it was certainly challenging. This course was designed for people with or actively seeking college degrees, and with only 5 people in the class total, a lot was expected of Erik and I participation-wise..."

... to be continued tomorrow.

Community Development with a Splash of Creativity

Here is our very first guest blog of the year, from Mr. Chester Polson! He would like you to know that the song of this blog is “Waterfalls,” by TLC.  I suppose that means you should either a) find it in your itunes library b) sing it aloud or c) change everything he says into waterfall analogies, or d) all of the above.  Enjoy!  


"Buenos días Friends, Family, Strangers, and most importantly donors!

 

I’m here to mix things up with a guest blog.  I don’t know if you read the daily life blog or check Manna Project International’s website more than I do but I feel like an introduction is probably necessary.  At the very least, it’s good to have a refresher so you don’t have to nod your head and pretend you know me like we're at a party.

 

I’m Chester Polson, but all of my American friends call me Chet. Everyone here either calls me Chester or Ché (I mostly get Chester). I recently graduated from Vanderbilt University with a double major in Economics and English. One day soon I hope to get a graduate degree in Economics focusing on Developmental or Environmental Economics. I went on two spring break trips with MPI in college, once to Nicaragua and once to Belize under the Manna umbrella. In addition to those Latin American travels, I spent three spring breaks in TijuanaMexico, building houses in high school and have spent a week in HavanaCuba, at an international youth conference. All in all, it’s a pretty good amount of travel for not speaking or studying Spanish.



 Chet is the Guapo in Blue 


I’ll gloss over the “why I’m here” and stick to the “what I’m doing now that I’m here” (though I’ll give you a hint: the why involves wanting to be involved in community development before spending five years pursuing a degree in it). I am (co)in charge of the microfinance and small business classes, (co)in charge of adult English classes, and in charge of children’s art. I also take out the trash around the house and spend my time hunting for change machines in Quito in order to replenish the bus jar. Just Tuesday I spent 3.5 hours heading into Quito and back to get $80 in quarters. This was the first successful attempt in three tries, but I now know where two broken change machines are.

 

So how are my programs going? Pretty well, so far as I can tell. I’ll start with Microfinance. MPI is partnered with a local cooperative, Esperanza y Progreso del Valle, or EPV. One of Manna’s overall goals here is to strengthen local institutions and that is really the heart of what our microfinance program strives to do. EPV has two offices, one on the first floor of the building our library is in, and one in North Quito, which was recently opened. Sadly, the new office has been a real drain on the coop. It currently has a very high default rate on its loans which has put heavy financial strain on the whole operation. We come in with two major spheres to work in: capacitación and fundraising. We spend some of our time trying to find international organizations that are looking to either loan or gift funds to microfinance programs like EPV. As you can imagine, the current worldwide economic climate makes it difficult to secure this kind of funding, which just means there is always more for Erik and I to look into. However, if any of you readers have suggestions or contacts, please let us know.

 

Capacitación, or capacity, is the second and probably more important part of how we work with EPV. We work hand in hand with EPV to try and get them better trained (to strengthen their local institution). The old PDs in charge of microfinance spent a lot of last year trying to get them connected to a larger network of microfinance coops in Ecuador as a way to gain access to more working capital and training. Sadly, after much effort, it turned out that this was not a very feasible option. EPV is currently interested in undergoing courses through Swiss credit, which we fully support. Manna has actually agreed to match the cost of the classes up to $1000 dollars to encourage them to actually get the training. We will check back soon to see if they were serious enough about these classes to register.  While it is exciting to be partnered with a legitimate local microfinance coop in the community and I look forward to getting to observe EPV’s work, it is a delicate balance to find what could work and what they are willing to try. There should be a lot of research involved this year.

 

In addition to the microfinance, Erik and I are also going to try and run a small business class. This is a much more pressing matter, and much more exciting. There is a University, ESPE, Escuela Politecnica Ejercito, or the Military Polytechnic School, close by that has a business centered local outreach called CIDE. CIDE runs small business classes taught by professors free of charge. Dunc was able to organize a class through them with some success, and we are looking to build upon that. We are currently recruiting people who either have university degrees or are actively pursuing university degrees to undergo an intensive two week training (40 hour weeks) at the end of September. At the end of the course, we will be certified to train instructors for the small business classes, which will have huge benefits to us. Last year Dunc coordinated the class, and due the rigorous schedule they demand I hear it was tough to get students. Once Erik and I are trained as instructors, we will be able to offer the classes in the community at a time and pace which is more accessible to anyone who wants to take a small business class. We still need to find some more people who are willing to undergo the initial training, but this is still a really exciting opportunity to bring small business training to the communities we work in.

 

Haley and I will be running Adult English classes on Monday and Wednesday evenings starting in mid-September. We will start planning for these classes soon. This should be a new experience for me as well, but as teaching Adult English is one of many avenues for human capital development, which I came down here to do, I look forward to it.

 

My final program is children’s art. I didn’t originally plan on teaching this class, but now that I am, I'm really excited about it. The art program was one of MPI’s more popular and well attended programs last year, but initially none of us current PDs showed much interest in continuing it. Holly explained how art is not offered in schools, and the kids have a lot of problems expressing themselves creatively. During class, there is a lot of copying from neighbors and making projects look exactly like the example (one thing I have been told is to be sure not to leave the example out so they can copy it)But, the kids still love it and Holly said she saw a lot of improvement in expressing themselves creatively during “free art days” in just a few months. I think creativity is another important ingredient in human capital development, and am more than willing to spend some time each week making caterpillars out of egg crates and gluing dried coffee beans to cereal boxes. I also think that making art projects with kids each week will be a nice balance to what might be slower and more tedious work with EPV and Adult English, keeping my spirits high.   

 

So there’s the latest. A lot of this hasn’t really begun in earnest yet, because everyone in Ecuador is currently on vacation, but I have a lot of exciting opportunities in front of me to pursue in the next year. I’m learning more and more that grassroots community development is a day-by-day, fly by the seat of your pants (and with a diet high in fruits and vegetables and low in processed foods, mine get looser every day) kind of work, but hopefully my American “plan it and get it done” mentality will be an asset rather than a roadblock to the kind of problems I’m bound to encounter in all of these programs this year.

 

Tomorrow: probably more pictures of kids from camp!

 

Until next time, keep reading and supporting us in all the ways you do.

 

Chao,

Chet

 

PS: Like what you see? Follow my personal blog! It isn’t updated nearly as frequently as this one is, but you can find it at ecuadorchester.blogspot.com