The NICA Fund: Profiles of Nicaraguan Borrowers
The Nicaraguan Credit Alternatives Fund (NICA Fund) provides financing to support economic activities of Nicaraguans with little access to conventional commercial credit. The examples listed below demonstrate how access to loans can help low-income Nicaraguans achieve economic progress as productive contributors to their communities.
Doña Mariantia and one of her daughters bag up ayotes for sale. Photo by the author. Marianita Sánchez
Campesina, Trinidad Central
Doña Marianita Sánchez is a poor campesina who lives in the rural community of Trinidad Central, on the western edge of the department of Managua. Like all rural communities in the department, Trinidad Central has serious social and economic problems. In this community, children have to walk a long way to school. Water is provided by an artesian well, managed by a community-organized board. Doña Marianita and her neighbors have water only every other day. A narrow path that is almost inaccessible during the rainy season links the community with Ciudad Sandino, the nearest town. Despite these and other difficulties, ACODEP is providing microfinance services to many poor families of this rural community. Doña Marianita and her family are among them. This extended family consists of Doña Marianita and her husband, one married son, one married daughter and two single daughters. Five grandchildren complete the family.
Currently, they cultivate a small parcel of about 17 acres. They grow corn, bean, sorghum, watermelon, tomatoes and other vegetables such as ayotes and pipianes. All the family members work on the farm. One of her daughters is studying business administration on Saturdays and works on the farm during the weekdays. They sell their grain, vegetables and fruit directly to end consumers, who are poor families from Ciudad Sandino. Thus, these consumers buy fresher and cheaper foods from Doña Marianita and her family than they would from a supermarket. However, the success of this humble family has required great efforts. They began cultivating 3.5 acres in 1979. Then they bought 7.7 acres between 1984 and 1987. But, the fami- ly was growing and needed additional land. Besides, the land was sharply eroded and the small plot was not registered. They urgently needed external financing but they did not have access to bank credit. They were stagnant. Fortunately, Doña Marianita got an initial loan of around $400 from ACODEP in 2002. She used part of this to grow watermelon, tomatoes, beans and sorghum. The other part helped to buy around 6.1 acres of additional land. Since then, she has obtained eight more loans. The production of grain, vegetables and fruits has greatly improved. Also, Doña Marianita has now chickens and pigs.
She explained that a portion of ACODEP’s loans helped to register the farm at the property deed office. Now, she and her family feel very secure in their land holding. Their housing condition has also greatly improved. The erosion has stopped and trees are growing on the farm. Doña Marianita has reserved a small portion of the farm as forest, which has helped to greatly improve the natural resources and hygienic conditions on the farm. Doña Marianita said she is very satisfied and grateful to ACODEP. She said that ACODEP has progressively increased the amount of the loans. She also said that other small farmers and poor women from the community obtain loans from ACODEP. Finally, she sent special greetings to WCCN’s members for their commitment to the needs of the Nicaraguan poor, like the members of her community.
Reina del Socorro Mendoza Suazo in her lab.Reina del Socorro Mendoza Suazo
Laboratory technician, Managua
Reina del Socorro Mendoza Suazo is a lab technician in her neighborhood in Managua. Opening at 7 a.m. Monday through Saturday, her modest yet efficient laboratory provides a vital service to the community. Reina explains that her lab makes life easier for her community, because without a neighborhood laboratory, her neighbors would have to travel across the city to one of the hospitals to get blood tests and urinalysis, causing them to miss out on at least half a day’s work.
She has been in business for over 20 years, but it is only through microcredit loans that she has been able to expand her business to better provide for the needs in her community. Reina’s loan from NICA Fund partner FODEM has allowed her to not only buy additional equipment, but also a generator that helps preserve blood samples during Managua’s frequent power outages.
Currently, she rents her lab space, but dreams of one day owning her own property. She hopes to take out future loans from FODEM to continue updating her equipment so she can expand the services offered, which would generate greater income and set her on a path toward property ownership. Future loans will also help her continue her studies and update her certifications.
Carla (second from the right), with family members.Carla Acuña Jarquín
Artisan, La Poma
Mrs. Carla Acuña is an impoverished young artisan who lives in the rural community of La Poma, in the municipality of Masaya. The village has a bad road, and is almost inaccessible in the rainy season. The nearest health center is in the city of Masaya. People have running water only two or three times a week. The frequent interruption of electricity does not allow artisans like Carla to run their modest equipment and machines regularly. Despite these adverse conditions, the León 2000 Foundation is providing microfinance services to many microentrepreneurs and artisans like Car- la’s family in La Poma and the surrounding communities. Carla makes beautiful cotton purses and other needlecrafts. She also raises pigs and sells wood handicrafts made by her brothers. Her extended family is made up of one sister and two brothers. All four are married and have families. Carla is 28 years old and has three children between five and twelve years old. All of them are studying, thanks to the hard work of Carla and her husband.
Carla and her sister and brothers inherited a small plot from their mother, though they are not agricultural producers, because the parcel is too small. Carla works closely with all the members of her family, and there is an equitable distribution of labor and income among them. A large portion of the products are sold to a Costa Rican merchant who then sells these products as Costa Rican-made handicrafts to tourists and exporters in Costa Rica (which is common).
Carla has been working with the León 2000 Foundation since 2004. She obtained a seven-month loan for $500 when it opened a new branch in Masaya. One of her brothers also obtained a loan to produce wood handicrafts.
The success of Carla and her humble family has required great efforts. They have many children and require ever-larger loans to operate their microenterprises. Carla employs several members of her family and four additional people to run her handicraft business.
Since 2004, Carla has had four loans that have helped her not only to run her microenterprise but also to improve the social and economic conditions of her family. Before working with the León 2000 Foundation, she and their children lived in a house built of plastic and scavenged wood. She did not have a TV or a telephone.
Carla expressed great satisfaction and gratitude to the León 2000 Foundation. She said that it has progressively increased her loan amounts. She obtained a loan of approximately $2,000 in September 2007. Finally, she expressed special thanks to organizations like WCCN that are helping León 2000 obtain funds in order to meet the financial needs of poor women like her.
The Zamora-Martinez family in front of their house in Quilalí.Santiago Zamora and Rosa Martinez
Teachers, Quilalí
Santiago Zamora and Rosa Martinez are first and sixth-grade teachers in Quilalí, a town nestled in Nicaragua’s mountainous region near the Honduran border. Nicaraguan schoolteachers are the lowest paid in Central America and given Quilali’s remoteness, its teachers are often some of the lowest paid in the country. Earning just over $115 monthly apiece, the couple has learned to be frugal with their earnings so that they can afford to send their five children, ranging in age from 10 to 17, to school.
Santiago and Rosa have been members of a NICA Fund partner agency, the April 20th Cooperative, for six and eight years respectively. They appreciate the knowledge and understanding that the April 20th Cooperative staff has shown regarding the financial hardships suffered by its members. The Zamora-Martinez household has primarily used microcredit loans to improve the living conditions of their modest home. Their first home-improvement loan was to replace their dirt floor with one made of tiles. In the future, they hope to receive a loan to allow them to obtain a sturdier roof.
The April 20th Cooperative was the first organization to provide microcredit services in Quilalí. The remote location and lack of paved roads to the nearest urban center, Ocotal, have made the savings and loan services offered by the Cooperative vital to the local economy. While other microcredit providers have since arrived, Santiago and Rosa prefer to borrow from the April 20th Cooperative because, “We like the philosophy of the cooperative. It’s more democratic.”
Maria Mercedes Diaz explains how her oven works while speaking to WCCN study tour participants.
María Mercedes Díaz
Baker, Quilalí
About three kilometers outside of Quilalí, María Mercedes Díaz is stoking the coals of her baker’s oven. Every morning at three a.m., she sets to work in preparing, baking and supplying assorted baked goods, including breads, pastries, and rosquillas. By ten a.m., her goods have been shipped down the dirt road to loyal shops and customers in Quilalí.
María now has two full-time employees, in addition to the work done by her daughters. Her eldest daughter is married and lives across the street. María is passing along her baking and administrative skills, with the intention that she will inherit the business someday.
Through earnings from the bakery, María was able to improve her house, which is now a two-room concrete dwelling, with a corrugated steel roof and extended veranda. On the end of the veranda is her adobe oven, which her husband built by hand as the volume of the bakery grew. María has taken a succession of three loans from Cooperative April 20th, to which she attributes to the success of her business. Before taking loans, she was only able to stock small amounts of baking materials. “Now I am able to buy what I need,” she says. She purchases her inputs from the Coop’s market. Although María is working to produce as much bread as she can, she still sees unmet demand. She hopes to continue expanding her business and providing baked goods for the community.
Situated on a hillside, with a panoramic view of the Segovian mountains, María concedes that there are disadvantages to living some distance from town; however, she prefers the quiet of countryside. “It’s beautiful,” she says, “You can see the river.”
Angelina Osejo displays flower arrangements created in her shop.Angelina Osejo
Florist, Managua
Angelina Osejo fled Nicaragua with her children during the 1980s and returned nine years ago to open a small flower shop. At that time, flowers were still only used for the deceased and flower businesses were struggling. Angelina's ingenuity expanded the market for flowers as she brought flowers back to life for the people of Nicaragua.
From her assured and confident manner, you would not guess that Angelina was initially fearful to borrow money. Her mother had taught her to always pay cash-in-hand. When asked what she would do if money ran out she would shrug her shoulders and reply, God help me. NICA Fund partner agency FODEM alleviated her fear by letting her know they trust her and she has been borrowing from them ever since. Now business is flourishing. "[It] is a small business but doing very good," Angelina proudly explains.
Because of the success of her flower shop, Angelina has been able to look after and provide for not only herself, but her employees and her customers as well. Her staff has grown from two employees to 17, the majority women, often single mothers, whom she feeds three times a day and continues increasing their salaries. Always aware of the dire economic situation in Nicaragua, Angelina makes sure her business remains socially minded.
As Angelina points out, "Flowers is really [a] very hard business to do in Nicaragua." Despite these odds, however, Angelina's determination has allowed her to consistently pay back loans and receive her largest and most recent loan of 40,000 Córdobas (over $2,000). With this loan, she will continue expanding the business. She plans on sending four people to start selling flowers on the street, thereby increasing the quantity sold and lowering prices to make her flowers affordable for people at much lower socio-economic levels.
Doña Florencia (left) and her daughter and grandson (right) display the rosquillas for which they have become famous in their community.
Florencia del Carmen Acuña
Baker, Ocotal
The department of Nueva Segovia is one of the poorest regions of Nicaragua. The Foundation for the Development of Nueva Segovia (FUNDENUSE) lends money to low-income borrowers in several towns and villages in Nueva Segovia. FUNDENUSE is a new partner agency of WCCN, receiving the first loan from the NICA Fund in December 2002.
One area that FUNDENUSE serves is a squatter village on an abandoned airstrip outside of Ocotal. The Nicaraguan government finally granted the inhabitants permission to stay on the land, but most houses remain very primitive. Most families lack anything that could be used as collateral, so even microcredit is out of reach for most of them. FUNDENUSE is one of the few microfinance institutions in Nicaragua that uses the group lending methods where borrowers co-sign on each others loans in lieu of collateral. Because of FUNDENUSE's group lending program, residents of the squatter village outside of Ocotal have access to credit and the opportunity to make their lives better through their own efforts.
One of the borrowers that lives in this village is Florencia Acuña. Doña Florencia, as she is known, bakes rosquillas (small rings of bread that have been baked until they are crispy) in a wood fired oven in her patio. Daughters, sons, and grandchildren all help with the daily baking operations. Several stages of bread making happen at once. One of Doña Florencia's sons mixes dough on one counter. One of her daughters twists dough into rings and places them on a baking pan. Another daughter places rosquillas that are just out of the oven in a holding tray so the baking tray can be reloaded and put back into the oven. The rosquillas are then taken by grandchildren to downtown Ocotal to be sold in the street.
Doña Florencia got her first loan from FUNDENUSE three years ago. She uses her loan to buy ingredients and cooking accessories. She has been able to expand the size of her kitchen with the increased profits that have resulted from her loan. She has been cooking rosquillas since she was 11, but this is the first time that she has been able to employ her whole family in her business. She beams with pride when she explains that she was able to buy school uniforms for all of her grandchildren this year.
Marta Sylvia Mendoza talks about how microcredit loans have improved the lives of her children.
Marta Sylvia Mendoza
Vendor, Nueva Guinea
Marta and her family run a small store in the market in Nueva Guinea, a town located in the Autonomous Region of the South Atlantic region of Nicaragua. They sell a variety of items, including fresh fruits and vegetables, packaged foods, snacks, condiments, convenience items and housewares.
Marta began working in the store nine years ago with her mother-in-law, and now bears the chief responsibilities of management. Her husband and their four children, as well as members of her extended family, work to keep the business successful. Marta began taking loans from Banco San Antonio several years ago to expand her inventory.
In conversing with her, Marta reveals a kind and dedicated personality. It is clear to see she is also a talented businessperson. She admits that in the beginning she was hesitant to borrow. However, she became convinced that financing was a valuable tool after taking her first loan. She humbly relates the progress of her business development and shares her goals for the future with quiet confidence. She also notes that quality of life for her family has improved. Her children are all attending school, including her eldest who is studying to become a veterinarian at a local university.
Marta prefers Banco San Antonio to other possible credit sources. She explains that the terms are the most favorable and she looks forward to continuing to access financing to succeed in her expansion plans.