Story and photos by Julia Turnbull
On the T in Boston in May, I told someone about my plans to spend the summer in Oaxaca with Fundación En Vía, helping them with their interest-free microfinance program. Interest-free microfinance? My travel companion was a bit skeptical about the ability of interest-free loans to make real changes in the second poorest state in Mexico. I must admit that I also was skeptical about how a $1,300 MXN loan could change the life of a woman operating a grocery store or a weaving shop from the front room of her home. I knew that microfinance gives women access to credit, which they might not otherwise have, but was unsure of the potential of microfinance to inculcate growth and create new opportunities.
After three months in Oaxaca, I discovered that interest-free microloans are making subtle, but significant changes in individual lives, communities, and regions. With these loans, women are turning their ingenuity and dedication into businesses that allow them to support their families and grow their local economy. Many of the women in Teotitlán del Valle and Díaz Ordaz are extremely independent and have crafted livelihoods out of the skills that have been passed down to them over the years. With one $1,300 MXN loan, one of our borrowers was able to expand her cheese selling business. Another borrower bought wax and cotton thread so she could begin making candles after an illness left her too tired to weave. A microloan is an opportunity; it can be used to buy a new piece of equipment, buy enough of a good to guarantee a week’s supply and build a customer base, or allow someone to build credit and reach financial literacy.
I met Isabel in June, when she received her first group of tourists for her first En Vía loan. Isabel, her sisters, and her husband are all weavers. She gave us a dying demonstration and showed us the looms her and her husband work upon. Since the first afternoon I met Isabel, I have seen her confidence in dealing with the family business and her ability to manage and plan for her family’s future soar. At this week’s Tuesday meeting, Isabel presented to her peers how she has used the business management and savings strategies presented in the course offered by En Vía to grow her business. A few weeks ago, Isabel painted her new logo, a jaguar, developed with the help volunteers from Mexico City on the front of her family’s shop along the main street. She credits the design for two rug sales this past Sunday afternoon and plans to reinvest the profits back into her business.
Another borrower shared with me that she is implementing what she learned in the classes, and is setting aside money from her profits to cover recurring expenses. Before school began this week, she was able to use money from her savings to purchase school supplies, new shoes, and a uniform for her daughter. Her ability to make this purchase in cash and not on store-credit is not only important for her own cash management, but it also benefits the local economy. The local stores are able to reinvest in inventory immediately, preventing them from running stock and loosing potential sales to the well-stocked stores in Oaxaca. Not to mention, that one of our borrowers makes and sells uniforms! The more the women feel that they are in control of their business money, profits, and personal savings, the better able they are to plan for reinvestment and important annual expenses. This all began with some $1,300 MXN interest-free loans.
En Vía’s interest free microloans are giving women new resources to help make positive changes not just in how they manage their business assets, but by also reinforcing community support systems, and building linkages in the local economy. In my three short months with En Vía, I met many women and saw many changes. One woman is planning on starting a new business selling her secret-recipe moles (sauces)in the local market, another has been able to save enough money to build a bakery in an unused space in their home, and many have learned how to save to meet the needs of their families. The most important positive changes that have come about from microfinance are difficult to quantify, but there is no doubt that the sum of the impact of more than 350 microloans is greater than that of each individual loan.