Microfinance: More than just a 502 memo

I´ve just returned from my second day in the field, and I realize that I take for granted how easy everything comes in the United States. Cars and reliable public transportation to bring you anywhere you need to go, set meeting times, punctuality, and reliable hours of business. Being in Nicaragua has brought me right back to my days in the Peace Corps, where a day that supposedly starts at 8:00 AM doesn´t really start until 10:00 AM; goals are a nice concept but reality never quite allows you to reach them; and the eight to ten interviews a day that you´re supposed to complete fall by the wayside as you listen to story after story of the challenges that poverty presents on a daily basis.

Consider Doña Juana, a microfinance client who fell behind on her payments with a previous institution and lost her house a result. Now she shops around from the 15 microcredit institutions available in the nearest city to find the best interest rates while she rents a wooden house with dirt floors and struggles to get her business up and running again. Or Doña Alma, who is crippled with migraines and had to abandon her business. She´s two payments behind and on the verge of losing her television, the only object that she could offer as a guarantee to her loan. Meanwhile, the interest continues to accumulate on her late payments, and when they send the lawyers after her to collect whatever they can, she´ll have to pay those costs on top of the interest, on top of the principal that she owes.

I find myself caught in the midst of the hot microfinance debate and the concept of the double bottom line: should a microfinance institution do whatever it has to do to maintain its profit margin, thus enabling it to reach a broader spectrum of clients, or should it take cuts in profits in order to accomodate the social goals that it supposedly espouses? Should microcredit be synonomous with some model of semi-compassionate capitalism? Does semi-compassionate capitalism even exist?

Meanwhile, we work 10-12 hour days to continue towards the elusive goal of reaching as many people as we can. Because the truth is, the only thing that I can actively do is listen. Ask questions. Record their responses. And present their feedback in a way that will hopefully influence FINCA International´s policies and will allow them to offer better products and services.

The idealist in me still lives. Let´s hope reality doesn´t let me down!