Microfinance saved Edelma Altamirano’s life.
I had lunch on Sunday with Edelma Altamirano, who lives in León, Nicaragua, but is visiting Seattle because she’s the featured speaker at Global Partnership’s Business of Hope luncheon on Tuesday at the Westin Hotel.
We ate at the Crab Pot at Pier 57, where she got to wear a paper bib and hit massive crab legs with a wooden mallet. Mary Herrick and Ana Maria Echeverria, both with Global Partnerships, were showing her around. It was a warmish, moist day full of tourists and kitsch.
Altamirano’s story — which you will have to go to the Tuesday event to hear in full — is the difference between microfinance that’s about money and microfinance that’s about people.
Nothing against money. Poor people would like more of it, which is what microfinance is supposed to be aimed at accomplishing.
But there’s lot of confusion lately around this exploding field of micro-lending, which includes other equally ill-defined, seemingly interchangeable terms such as “microcredit” and “microloans.”
The confusion stems from the fact that most of the explosion is by for-profit microfinance organizations that are actually trying to make money for their investors, in addition to helping the poor.
That’s bad, right? It can be. But it isn’t always. That’s what makes things confusing.
Altamirano’s story may help make it a little less so.
Altamirano, who is 37 with a 20-year-old daughter, a grandson, a 16-year-old son and a husband who doesn’t work, got her first loan of $60 many years ago from a Latin American microcredit organization called Pro Mujer (in English, Pro Women).
Global Partnerships financially supports Pro Mujer with the money raised here in Seattle. And Global Partnerships, a non-profit, also pays its donor-investors a return, up to 4-5 percent.
Since that first loan from Pro Mujer, Altamirano has repaid many loans and stepped up her borrowing to create a thriving clothing sales business. She now gets $1,000 loans that she repays every three months.
“In Nicaragua, people are very poor and many of the poorest are women,” said Altamirano. The poor usually have no collateral to get a traditional bank loan, she noted, which creates a vicious cycle of poverty. Through organizations like Pro Mujer and Global Partnerships, poor women are specifically targeted to receive small loans aimed at breaking this cycle.
What saved her life is the additional emphasis Pro Mujer puts on health and education.
Every two weeks, the borrowers are required to meet with Pro Mujer to discuss how their projects are going and if they are going to be able to repay on time.
At the meetings, members of Pro Mujer also work with the women to improve their health and education. Altamirano said she knew little about PAP exams — or that cervical cancer was the leading cause of death in women in Nicaragua — before coming to Pro Mujer. At every loan meeting, they were asked about their health status, including their latest PAP test.
Altamirano finally went in for the PAP test which revealed a rapidly advancing pre-cancerous condition. In 2006, she underwent surgery to prevent it from becoming a deadly cancer.
“I could be dead now but God had a plan for me and put Pro Mujer in my life,” she said.
Another way to look at it is that her husband, by being idle, put Pro Mujer in her life. But I’ll refrain from engaging in such theological teleology.
The most important point here is that Pro Mujer is focused not just on microfinance for the sake of microfinance. It isn’t just about money. They incorporate into their financial assistance efforts these programs — which, arguably, have costs that cut into the margin — aimed at improving women’s health, education and overall social welfare.
The investors don’t get a financial return on these additional programs. They may get less of a return financially, but more of a return socially.
That’s one way to tell the difference between microfinance for money and microfinance for people.