So I've been putting some of my final work together for ICADS, and realize that I haven't been very specific about my work here in Matagalpa!
So here it goes..
Usura Cero was launched in mid-2008 by the Sandinista government in Managua as the first national microfinance program in Nicaragua. It had originally planned to reach out to 80,000 women in five years, but at the end of 2008, it had already granted loans to over 70,000 in all.
The loans have specific requirements..some of which are strictly followed, some aren't.
The idea is to only loan to women from urban barrios (neighborhoods)..a sharp contrast from other programs that largely target subsistence farmers and agricultural production as a whole. There are 16 regional offices--one for each departamento (state) in Nicaragua. The office here, in Matagalpa, currently manages 242 groups of women. Officially, these are called "grupos solidarios"..groups of 5-10 women that are meant to support each other through the duration of their individual loans.
In Matagalpa, 53 of the 242 groups are currently in debt. There is no money available for loans to new groups, so for now, the money is just being recycled for second/third loans.
The amount of each loan varies between 1,850 and 5,500 cordobas ($89-$265)..although the vast majority of women, in my experience, opt for the maximum loan of 5,500. There are four plans for repayment--3, 4, 6, or 8 months..and interest increases with time--1.27, 1.66, 2.45, and 3.24 percent respectively. This is much lower than what the private banks offer here, but contrary to public opinion, microfinance is not free in Nicaragua.
I've been tagging along to learn from the four different stages of these loans.
First, there is "capacitación"..the two training sessions required for each loan recipient prior to receiving her check (and one for each subsequent loan). They are interesting to take part in. Organized by an external institute, they focus on business strategies as a way for women to manage more money than they usually see in a month.
Second, there is distribution..a fun kind of celebration where the groups come together for their checks. Usually, this is accompanied by a speech from a government official, or something formal to contextualize the event.
Third, there are payments. Working in the office means getting to interact with women that come in to make weekly payments..always an interesting opportunity to see how the loan is progressing.
Fourth, and probably most importantly, I get to travel with the "Oficial de Crédito" on collection visits to the barrios (neighborhoods). This is the most life-changing part of working here..getting out to the barrios, and engaging with women who are surrounded by immense poverty.
My views on the program, and microfinance as a whole, are mixed..but it's something I won't comment on online. I will say that this has been an unreal experience--something I won't ever be able to forget. I can't wait to bring my experience back to Hampshire and try to make sense of all I've seen in these quick two months.
I will try and get to a computer next weekend for my final (!!) blog. After that, we will be traveling back to Costa Rica with little time to get online..finishing up with finals, presentations, etc..
But for now, thanks so much again for checking in! It's been fun writing here..has been a nice little weekly ritual. :)
Have a happy Thanksgiving!
