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.
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.