One of our goals as an Economic Development volunteers is to promote community banks. Basically the idea is that a group of friends, family, co-workers etc. form a bank built around trust. As a group they elect a board who runs the meetings, decide how often they want to meet, how much each person will put into the savings each meeting, and all of the details of late fees, interest rates and so on.
The group members are able to ask for loans by presenting their intentions to the group. Then they pay back the loan in a fixed amount of time with interest. In the ideal situation a person is taking out a loan to invest in their business or do a short term income generating activity… but sometimes it is for an emergency like medicine.
At the end of a fixed amount of time, i.e. 6 months or a year, the group liquidates the bank and every member receives their savings plus their portion of the profits made from interest and fines.
Once functioning these banks are incredible because they offer people access to small loans who normally would not be able to go through a bank, and after a few meetings the group is pretty much self-sustainable so it’s a project that can continue long after we end our service!
Now the hard part for me has been presenting the idea and finding a group that is interested, so this past week I headed to the site of another economic development volunteer to learn more and practice presenting with some interested groups in her community.
We started the technical exchange with the liquidation of the bank she has been a part of for the last six months! It was a group of municipality workers who wanted to see how the banks work so they could then go out into the community and promote the concept. It was interesting to talk to them about their experience, and the overall consensus was that this was the first time in their lives that they tried to save money. Everyone in the group saved about 240 soles over 6 months and they each received 65 soles after the profits were divided!
The most touching part was that the cleaning lady had opted to saved three times as much as everyone else each week, so she ended the bank with 720 soles in savings. When I asked her what she planned to do with the money she said, “My daughter wants to be a nurse, so I am going to pay for her first semester of university.”
The next day we headed out to the campo with one of the promoters from the previous night. She works with an association of farmers who are working on a greenhouse and other projects.
In true Peace Corps fashion we arrived after a 30 minute walk and were given the grand tour of this beautiful land! After about an hour of looking at different plants and animals we started the meeting… sitting in a circle on the grass.
Most of the farmers don’t have a lot of extra income, so we talked about how the beauty of a community bank is that the group sets the amount saved each week and it can be as little as a few soles. There was a lot of interest, so hopefully something comes of it for Alejandra.
The final presentation was on Saturday morning to a group of health promoters in the hospital. We were expecting a bunch of nurses in scrubs, so when one by one women and men in traditional clothing showed up we were quite surprised! Turns out the health promoters are people who live all over town and they work in their little neighborhood to promote healthy living. So we were a little confused at first, but at the end of the day we were able to talk to people who could potentially start quite a few banks.
It wasn’t all work, because Huamachuco has some amazing ruins and other tourist attractions! More to come on that later. For now I am heading back to site with a new confidence, ready to get out there and start some banks in Contumazá!