The Microfinance Diaries

Microfinance Buddy: Winston the Beagle

2008-07-09T14:32:00.000-07:00

Anticipating that I'd be a bit lonely on my trips, I arranged to get a dog--a cute, 2 month old beagle named that I named Winston. Not only was a he a good and warm companion on those freezing nights in the Andes, he also helped me befriend the townspeople. Everyone in Casta kept asking me, "How's Winston? Where's Winston?" when I walked around meeting people. They all thought he had a silly name--they didn't know who Winston Churchill (his namesake) was, and pronounced it "Weenstone", giggling. It was really cute. Winston helped break the ice immediately on the bus on the way to the town, so I already knew several people before I arrived. In all, having a puppy with me was very useful and fun.

What's in a name?

2008-06-18T16:55:00.000-07:00

"Why don't you call it Acacia International"? That's what my mother said when I was trying to name my charity. I didn't give it that much thought until she explained to me what an Acacia tree is. It is a very special species of tree that thrives all over the world, but is closely linked to Africa. It can grow in very harsh conditions, provides food for giraffes, and serves as a meeting place for the Masai.

These characteristics make it a very good symbol for microfinance in general: hope for poor areas, prosperity, and communitarianism.

Countdown to San Pedro de Casta!

2008-06-18T15:32:00.001-07:00

Only 5 Days until Monday--the big day, where I make the 7 hour trip out to San Pedro de Casta! It involves 2 bus rides, one of which I hear is quite bumpy. I'm very excited! I've gotten almost everything prepared for the trip...really the only thing left is to pack and hope I don't take the wrong bus!

My first microbank is just a little over a week away!

Wish me luck!

Gift from God: Churros

2008-06-18T15:22:00.000-07:00

One of my favorite things about Latin America is the Churro. This delicious, doughnut-type pastry is actually Spanish is origin, but so popular here that you can get them 24 hours a day. Street vendors (maybe helped by microfinance?), gas stations, restaurants, everywhere. I hadn't had one before I came her, but I find myself sneaking off to buy one late at night for dessert.
Perhaps this isn't entirely related to my project, but they are so good (or I am so obsessed), I thought it was worth a post.

Mujer y Sociedad Parte 2

2008-06-14T15:13:00.000-07:00

Today was my second visit to Mujer y Sociedad, where I watched a class in business. It was a great experience being an observer! The women (and a few men) were being taught how to make shirts to sell. This got me thinking: should I also offer some sort of class? Not in how to make any one thing, but in business or strategies. My problem with it is this: do I really know more about business than these people? Isn't it a bit arrogant of me to think I can do what they do better than them? To reconcile the need for training with my lack of experience, I have decided to ask successful people in the community to give classes to my microbanco. I'll keep you posted!

The South American Explorers' Club!

2008-06-13T12:34:00.000-07:00

The South American Explorers' Club is an oganization that has been very useful in planning my trip as well as providing various resources (I took a Spanish class there, they have a library, I've made a few friends there, etc....). Most importantly, the SAE collects trip reports where people who have been to the place you want to go write about their experiences. Luckily for me, a few people had been to San Pedro de Casta, and they had all had a good time and gave me some good advice. One thing that scared me: no running water in the hotel!

Below are a few pictures!

My Microbank Toolkit!

2008-06-11T13:44:00.000-07:00

What is in my Microbank toolkit?
-Knowledge of microfinance (of course)
-Cash box
-Notebook and Pens
-Money
-Calculator
-Enthusiasm!

Yes, today I went shopping to buy the things I'll need to bring with me, and I've also arranged to wire the money here. Probably the most important thing, though, is enthusiasm for my project. If I didn't believe in it, the cold showers (if showers at all....), uncomfortable living quarters and inevitable parasites would be too much. But I think that I can make a real difference, and so I'm going to suck it up and have an adventurous summer.

Meeting with those women from Mujer y Sociedad yesterday really energized me. I could tell how much they really believe in it, and they told me that they have seen how it improves the lives of the women they help! And lucky for me, I get to see this first hand on Saturday and again on Tuesday, when I'll have the opportunity to watch a repayment meeting and talk with women who are applying for loans. I am incredibly excited!

Watch this space!

New Partner: Mujer y Sociedad

2008-06-09T16:33:00.000-07:00

Today I met with a few women from Mujer y Sociedad. It is a fantastic organization here that offers local women help--from job training and microloans to internet access and sewing machines. It was an eye-opener and my first real meeting entirely in Spanish! (Phew, a little bit scary!) Not only did they give me advice, but they're actually letting me go to a micro-bank meeting Saturday (the one where the women pay back their loans), and then will take me to a different section of town next Tuesday where I'll see microfinance at work! I couldn't be more suprised or excited!

Suprises in Lima!

2008-06-08T15:56:00.000-07:00

I've been suprised by a few things here, some good, some bad.

It is very safe and people are very friendly and accomodating about my lack of Spanish (although it's gotten a lot better in just 3 days with much practice!)--two welcome unexpected things.

A bad suprise, though, is the pollution. I've had a resurgence of asthma problems, and because of it, I will have to stay out of Lima as much as I can. That's very unfortunate, because I really like it here! I think the pollution is something that really should be dealt with because it is costlier not to, but I could be extra biased because it affects me in particular.

I am going to spend all of this week getting ready to go out to San Pedro de Casta and then next week my project will officially begin!

Estoy en Lima!

2008-06-06T11:24:00.001-07:00

Hi! I've finally arrive in Lima! I've spent the day exploring Miraflores, my new home, and running errands...I've bought a Peruvian cell phone and my groceries. Can you imagine---only $6.60USD!

I love my room--my landlady is incredibly nice.

By far the hardest part is the Spanish. Reading it is one thing, but hearing people speak is another! Also, Peruvian Spanish is a little bit different than the Mexican Spanish I learned.

The Return of the Shining Path

2008-06-02T17:07:00.000-07:00

Yesterday a mass grave of about 60 peasants killed in the 1980s was found in the Peru. The people were horrendeously killed by the military (the ones fighting the terrorist group the Shining Path) for their livestock--under the guise they were looking for rebels. The massacre was generally denied until now.

However, a worse development is the return of the Shining Path. Supported by drug money, they are now starting to recruit poor farmers who have suffered from rising costs. There are two groups of thought as to how to prevent the spread: address the poverty in the Andes (what Garcia is trying to do, and what I will hopefully do this summer) or crack down on the group violently. The latter was used by Fujimori in the 90s and basically destroyed the group. However, since the underlying problem--and thus the draw of the extremist ideology--remains, there has since been a return of the violent Maoists.

I'm actually a bit worried about encountering the group on my trip. It's sort of an irrational fear since they are generally limited to the jungle and the eastern part of the Andes....but somehow I feel someone might sense that I'm a Capitalist and go after me. Plus, as an American, I could possibly be a valuable hostage. Even if this is an overreaction, I am still getting a dog and bringing pepper-spray!

Tick Tock Tick Tock

2008-05-31T01:17:00.000-07:00

The clock is ticking! I leave in less than 1 week (Thursday is the big day!), so I have been getting the odds and ends taken care of--alerting the bank (so my card isn't automatically shut off), getting Peruvian Soles, and testing out my sweet camping equiptment.

I've also taken over one room in our basement and turned it into "Fort Philanthropy". It's filled with basically everything I need to bring:

And that's actually only half the room....the shelves are filled with things, too. That big blob on the ground is my tent.

Don't worry, Mom, I cleaned it up. :-)

La Cocaina en Peru

2008-05-31T01:05:00.000-07:00

Cocaine is becoming quite a big problem in Peru (the world's no. 2 supplier), and it is closely linked to the Shining Path, so I thought it was relevant to this blog & the project.

Cocaine is bad news for Peru, and for reasons very different from why it's bad news in the United States. In neighboring Colombia, cocaine pays for the violent guerilla wars and that's something El Presidente Alan Garcia doesn't want to see happen in his country (and understandably so). Basically, the Shining Path is making their money off of drug trafficking to other South American countries & Europe. With $50 million from Uncle Sam, Garcia & Co. are attempting to destroy drug labs to prevent funding to the Shining Path, but it's sort of like Sisyphus--as long as there's demand, there will be a supply and the recent disarray in Colombia has given the Shining Path & others a great entre into the drug market.

If you want to learn more, read this article.

I'm approved!

2008-05-29T20:53:00.000-07:00

With less than 1 week until I arrive in Peru, the University had still not decided to release my grant money, putting me in quite an awkward position. Until today! Although it will be a few days until a nice fat amount lands in my starving bank account, they have "approved" my project (read: believe I won't be using it to buy a yacht) and just need to wire it to me. Phew. It was getting close there!

I should note that the school is being, ahem, less than reasonable about releasing all of the money. They've only given me 3/4's of it (the amount directly going to the villagers) and will "reimburse" me the rest of it (my personal expenses). That's a bit ridiculous, I think, but I have to work with what I've got.

International House Heroes

2008-05-27T14:27:00.001-07:00

Brian Davis
Director of Finance & Administration at I-house, Brian Davis has been instrumental in navigating the murky waters of University red-tape. Actually, he's done almost all of it for me.

Since my grant is a bit unusual and I have to go through the University's comptroller's office, Brian has been coordinating all the necessary steps and paper-work.

I would be in big trouble without him!

Bill McCartney
He's the Director of I-house and everyone's favorite staff-member. Really.

He's helped me with my application to the Davis Projects for Peace grant and with the process for final approval and everything. He told me what I should add to my proposal and what I should look into--it was a big help.

Update: Camping was a bust

2008-05-23T08:57:00.000-07:00

It was cold. It was scary. And I could've sworn I heard the blair witch.

So last night instead of camping in the backyard, I went inside to my nice warm bed (and wi-fi connection). Yes, I failed my first attempt at camping! I guess this girl just isn't as rustic as she thought!

Peruvian Pride: The Llama

2008-05-22T20:33:00.000-07:00

Oh, the llama. One of the world's most beloved pack animals!

But what do you really know about the llama?

Some Imporant Llama facts...you should know!

Height: 5 and a half to 6 feet

Weight: 250 to 450 lbs (fatties)

Pack weight: 25% of body weight

Population: About 7 million in South America

Temperment: Curious, a bit skiddish

Bad habits: Spitting (naughty, llama!)

Uses: Pack animal, for yarn

My Tent!

2008-05-22T17:23:00.000-07:00

Today I put up my tent for practice! I've never pitched a tent or slept outside, so tonight I'll be camping in our backyard. (Ignore the house in the background....) It'll be my home away from home in just a few weeks but unfortunately a nice bathroom won't be just a few steps away when I'm in Peru. It's quite nice inside the tent and will make a lovely shelter for me and my dog.

Tomorrow I have my conference call with the U of C grant office, so wish me luck. They are currently holding my funds hostage and say that they "hope everything will be resolved" by the time I leave.

Soon to come: video blogs!

A Very Brief History of Peru

2008-05-21T19:06:00.000-07:00

The Incan Empire (1438-1572):

Based in Cuzco, the Incan Empire stretched down the Western side of South America and encompassed many different ethnic groups, which all spoke the language Quechua (which, even today, is commonly spoken in Peru). It was a very advanced civilization (albeit short-lived), with a well-developed transportation system. Machu Picchu (see right) is probably the most famous land-mark of the Incas.

The Spanish Empire (1532-1824):

In 1532, Francisco Pizarro arrived in Peru. Until 1534, he allowed a puppet Incan government to exist, but he soon declared Peru a Spanish colony. He moved the capital to Lima in 1535 and undertook a massive effort to convert the natives to Catholicism. After Pizarro's death, Spain sent a viceroy to manage the country and quell the frequent Incan rebellions.

The Republic of Peru (1824-1948):

Jose San Martin & Co. went around South America liberating all the colonies of Europe, including Peru. He was named the first Protector of the nation. After that, Peru fought wars against its neighbors, including Ecuador and Bolivia. Eventually, things settled down with only a few internal conflicts (read: politics as usual).

Modern Day Peru (1948-present):
Peru has since undergone some difficulties, namely a few military dictators and the Shining Path fiasco. However, it has come out of it OK, and there is now a good economy and the country is democratic. Things look A-OK (provided Fujimori doesn't cause too much trouble in the future).

Alan Garcia, friend or foe?

2008-05-20T18:45:00.000-07:00

I will admit that I don't know much about Peruvian politics, despite having done a project on it in 7th grade.

However, I do know that Alan Garcia, el Presidente de Peru, enacted in 2006 a new law that requires foreign NGOs to register with the government.

To the ordinary University of Chicago (undergraduate) economist, this sounds suspicious. Why would you want the government interfering with private matters? This is normally bad news.

However, in this case, the registration of NGOs is a positive. The law was enacted to keep an eye on groups that support communism and hurt freedom--such as the Shining Path (see last post). So, Garcia is really just trying to preserve freedom and stability in Peru, which is really important for the health of the Peruvian economy. Your typical humanitarian organization is not effected at all and there are no taxes levied on these groups.

How does this effect me? It doesn't. I'm coming to Peru on a grant and not with my organization (sneaky, eh?), and hopefully I will partner with MiBanco--a Peruvian MFI that the World Bank has set me up with--anyways. Plus, I'm doing capitalist work, and giving away thousands of dollars, so they really shouldn't be too upset.

El Sendero Luminoso

2008-05-19T17:51:00.000-07:00

For those who don't know, Peru was host to a horrible clash between El Sendero Luminoso (The Shining Path) and the legal government that lasted from 1980 to 2000. The Shining Path was (and in a few remote places still is) a violent Moaist group that terrorized government workers and ordinary citizens. They didn't limit themselves to the bourgeois, either; they even attacked poor farmers. They were unpopular (only about 15% of Peru ever supported them) and tortured or assassinated many many people. About 70,000 died as a result of their guerrilla war.

The effects of their campaign carry beyond the death-toll, though. For the work of only a few people, Peru as a whole suffered quite a lot economically. Foreign direct investment was basically nil in the 1980s and didn't pick up until most of the fighting had subsided.

Peru has since stablized and growth has been robust---with a real growth rate of about 8%. Unfortuantely, "los pobres"--the ones the Shining Path was supposedly fighting for--are often left out of the expansion, and there's widespread unemployment/underemployment around the countryside since there's a dearth of financial resources.

This is where microfinance comes in! Microfinance institutions--and there are several ones doing good work in Peru, such as Agrobanco and MiBanco--bring capital (and capitalism) to the poorest of the poor and give them opportunities for development that were taken away by the Maoists. Peru has a really wonderful future ahead, and I hope that this summer I can help a few people in the country make it even better.

Microfinance Mascot?

2008-05-18T17:17:00.000-07:00

This is Chip. (Full name: Chocolate Chip)

What does Chip have to do with microfinance, you may ask?
More than you might think!

When I go to San Pedro de Casta and Arahuay in just a few weeks, not only will I be alone (translation: lonely and scared) but I might appear foreign and strange (rightly so, eh?) coming to offer these people money with no strings attached. That is where Chip comes in. A dog companion solves 2 of these problems at once. Not only will she provide me with company, but he'll make me appear more friendly and inviting--which will help assuage people's fears and will encourage them to come up to me, if only to pet my super-adorable dog. Accordingly, I've arranged to adopt Chip (formerly "Vacky") from ALDEA, a humane society in Lima.

More on Chocolate Chip to come. Also, only 18 more days until I arrive in Lima!

The Math of University Red-Tape

2008-05-12T12:52:00.000-07:00

Translation: International House ("Home") plus the University of Chicago equals Red Tape

Translation: Red tape plus Genevieve equals frustration

Shout Out: The World Bank

2008-05-08T12:40:00.001-07:00

Ah, the World Bank. The glamour of Wall Street combined with the goodwill of the United Nations. Luckily, it lacks the scandals of both. Through a friend from school, I was able to get in contact with a few people over there who have offered some fantastic advice and pointed me towards some helpful resources--such as people on the ground in Peru & research on which microcredit models work best. They did this in addition to their (I'm sure, difficult) day jobs. Their assistance has really been invaluable, so I thought I'd thank them on me blog.

People from the World Bank I'd like to thank:
Kenneth Lay
Heike Reichelt
Hannah Siedek

Getting ready to leave!

2008-05-06T18:15:00.000-07:00

Dear all (or perhaps just Dad?),

I'm heading to Peru the first week of June, so I am busy getting all the things I need: emergency first aid kit, tent/sleeping bag, water purifier, flashlight, vaccines (ouch!)...etc.

Today I got 2 shots: tetanus and yellow fever. I think the picture explains how I feel about it.

I also bought my camping gear and a few things for safety. Once I get everything, I will post a picture of my living room filled with all sorts of things for Peru (no llamas, sorry).

I'd like to thank two sponors, SteriPEN and Moosejaw. They are both helping provide goods that will keep me healthy and safe and allow me to do my job. It's also allowing more funds to go directly to the poor.

Microfinance heroes you should know!

2008-04-24T23:54:00.000-07:00

Muhammad Yunus

The closest thing to God on earth? Perhaps not, but to microfinance enthusiasts like me, he is sacrosanct. Muhammad Yunus is a Bangladeshi economist who in 1976 came up with the idea of microfinance--small loans for the collateral-less poor--to remedy the povery he saw in his home country. The result? The Grameen Bank, which has helped more than 7 million people--97% of whom are women. For his work, Yunus was awarded the Nobel Peace Prize in 2006.

John Hatch

Another microfinance innovator, John Hatch started FINCA in 1984 in order to created a sustainable way to help the poor. He is a man who has dedicated his life to service. (For those of you who read gossip columns, FINCA is the charity the gorgeous Natalie Portman supports) On a personal note, I cannot think of a better role-model for young people. Having witnessed first-hand extreme poverty in Latin America, he took it upon himself to come up with a solution, even though he was just out of college.

Queen Rania of Jordan

The gorgeous Queen Rania is the face of the real results of microfinance. Since Jordan lacks the natural resources of other middle-eastern countries, village banks provides her citizens the ability to grow their own businesses. A champion of womens' rights, Queen Rania has used microcredit to empower women and give them ability to provide for their families. She's quite sharp, and I suggest you look her up on youtube.

Welcome!

2008-04-24T22:08:00.000-07:00

Welcome to my blog! I will be posting about my trip to start microbanks in rural Peru & what's happening with Acacia International.

Right now we are in the first stages of what I hope will be a global microfinance charity. We are now incorporated & are seeking 501(c)3 status from the IRS (tax exemption, for you non-CPAs).

I will be travelling to two villages, San Pedro de Casta & Arahuay, in the Andes this summer to open up our first microbanks. It will be quite an adventure, and I hope to have some funny stories for you.

I will also spend a lot of time in Lima fundraising so that I can continue helping the Peruvians after I've left.

About me: I am a 19 year old economics student at the University of Chicago. I have started Acacia International to provide economic opportunities to the international poor and hope to be a philanthropist when I graduate.