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Guest blog: lendwithcare microfinance - vicious to virtuous cycle

Maritza Rosario, 27 had a difficult start in life, but a microloan from FACES has allowed her to build a giftshop business that enables her to have more freedom. Maritza Rosario, 27 had a difficult start in life, but a microloan from FACES has allowed her to build a giftshop business that enables her to have more freedom.

Olivia Crellin, shortlisted in the Guardian Development Journalism Competition, travelled with CARE to Ecuador. In part two of her blog she heads to Machala. She meets two women who defy her expectations.

Read part two of Olivia's blog

Read part one of Olivia's blog

As Kathryn and I arrived in Loja, so seemingly did the rest of Ecuador. We had arrived just days before the annual Virgen de Cisne festival, a pilgrimage that sees visitors process from as far away as Quito, some crawling for days on their knees. We were lucky enough to be staying in the same hotel as President Rafael Correa himself who was taking advantage of the crowds to give his weekly public Q&A television appearance in Loja. (We did not hesitate to get a quick photo with him and bring up the topic of domestic workers to which he assured us good work was being done!)

Lendwithcare.org

Perhaps more importantly for me, however, was the presence of Ajaz Khan in Loja, a world specialist on microfinance and CARE employer, who was in the area looking for new partner organizations to expand CARE’s www.lendwithcare.org scheme. Lend with Care is a joint micro loan project set up by CARE International and in partnership with the Co-Op supermarket. It allows you to give loans to entrepreneurs in up to six countries to help them work their way out of poverty. Once one entrepreneur has used your loan and paid you back you can reinvest that money in another entrepreneur continuing the positive cycle.

We were to have meetings with one of CARE’s new partners under this scheme – FACES (Fundación de Apoyo Comunitario y Social del Ecuador) and be taken around the area to see their work. A microfinance institute with a strong social conscience but an unarguably successful business model – despite having some of what banks would term the ‘riskiest’ customers FACES is the number 1 loan scheme in the region for repayments, FACES was a perfect fit for the lendwithcare programme, Ajaz explained.

A vicious circle into a virtuous one

FACES has a whole range of products – including their own subsidized pharmacy, life insurance, schemes for borrowers with disabled family members and cancelling loans in the case of death. This promotes the reduction, not creation, of poverty. The idea according to Executive Director Luis Palacios Burneas is to “turn a vicious circle into a virtuous one” - exactly what the domestic workers from the city had been asking for.

FACE’s friendly and numerous local branches mean that customers receive first-class and quick attention, allowing the flexibility of taking out further loans at little notice and after a consultation with a FACES worker that is intimately acquainted with their case. The figures for borrowing begin small and have strict pay-back schemes at low interest rates (2.5% a year in comparison with the 6% of interest a month that a private money lender would charge) which reduces the intimidating and often unmanageable amounts banks in Ecuador force lenders to borrow. Once you have your loan FACES also runs courses in bookkeeping and business management to allow their new entrepreneurs to make the most of their investments.  

Enterprising and ambitious Juan had attempted to diversify his farm in the past, but two loans from the bank to build a greenhouse and to start a small pig farm had met with disaster. Without FACES’ help he would have been forced to borrow from a moneylender, possibly resulting in bankruptcy.

Business innovation

FACES has given this entrepreneur the chance to continue to innovate his business – amazingly in only a small space of land Juan grows a variety of fruits and vegetables (including the best oranges I’ve ever tasted) but also his own fishery pools, small sugar factory and makes artisanal wine. Thanks to FACES’ support he can afford pay off his previous loans and continue to diversify, making sure that his land is being productive throughout the year to pay for his children to keep studying medicine.

For domestic workers an institution like FACES is also a particularly attractive option because unlike traditional loan-lending establishments they do not require the signature of a woman’s husband for her to take out a loan. This gives her the financial freedom to make their business decisions independently of her family.

Rosa Sanchez Cumbicus is one domestic worker who has taken advantage of the FACES schemes and set up a small café. She works as a domestic in the mornings and as her own boss in the afternoons, spending time with her children in the café. Burneas believes that she will soon be able to stop domestic work entirely: 15-18% of FACES’ customers used to work as domestic help. As well as giving her more time with her children, the business has earned Rosa the respect of her husband and stopped his abusive behaviour. He appreciates the extra money she contributes to the household.

Grateful to UK lenders

Glenda Solano, a mother of 9 and a part-time domestic worker, set up a catalogue clothes business on the side and now employs her own domestic help to look after the children. For the last four months she has been the family’ sole earner as he husband searches for work. She is incredibly grateful to the lenders in the UK for their contribution – with the money she has earned as a result of her catalogue sales she has made many home improvements.

For Maritza Rosario, 27, a FACES loan provided an alternative means of income that brought her closer to her dreams. Orphaned at a young age she did domestic work from the age of 18 to pay for her studies in Accounting. Nothing like her business, a gift shop selling toys, cards and romantic gestures, existed in her town before and she has plans to expand if it proves a success. The shop allows Maritza to live independently and reduces the pressure on her to marry for financial stability. If this option existed for more young Ecuadorian women then perhaps they would not enter into the trap of working for richer relatives’ or strangers in their houses and could seek out a more ambitious path that they are in control of.

Part of FACES’ success is its localised and personal approach but my feeling as I left Loja was that it was exactly this sort of option that the domestic workers in the cities felt the lack of. Let’s hope the work of CARE, lendwithcare and all those that sign up to the scheme can help make that possibility come true, and through it the dreams of those domestic workers.

Find out more about lendwithcare.org






Olivia Crellin, Freelance Journalist

About the author:

Olivia Crellin is a young freelance journalist currently based in Santiago, Chile.

Read parts 1 or 2 or 3 of her blog on her trip with CARE and The Guardian to meet domestic workers in Ecuador.

Find out more about her work on her own blog.





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