A Visit to the April 20th Cooperative in Quilalí, Nicaragua
By Brenda Pfahl
On January 10th, the fourth day of this year’s economic development study tour, participants in the WCCN study tour had the privilege to travel to Quilalí to visit one of the NICA Fund partner agencies, the April 20th Cooperative. Quilalí is 263 kilo-meters (about 165 miles) from Managua in the northern department of Nueva Segovia. It is an area of the country where Augusto Cesar Sandino himself helped to organize Cooperatives in the 1920s, and an area of the country deeply impacted by the Contra War during the Sandinista revolution. Traveling by bus to Quilalí from Managua takes about seven hours. Much of the trip is on unpaved roads which wind upward into the mountains. The journey was breathtaking and well worth the long, hot ride.
The April 20th Cooperative is named after the date of its founding, April 20th, 1994. The credit union was formed by 51 citizens of Quilalí, and today has grown to approximately 4,700 members with three branch offices. The Cooperative has grown rapidly since its inception, both in membership and portfolio value. Today the total portfolio is approximately $5.4 million. In the next five years its goal is to continue to expand its membership, add two more branch offices in the region, and nearly triple its portfolio to $15 million.
The mission of the Cooperative is to offer diverse financial services to all sectors in the northern area of Nicaragua. This includes savings and loan products, as well as other non-financial programs. A wide range of credit services are offered, including loans for housing, agricultural production, small business and other commercial enterprise. The Cooperative also offers a unique type of life insurance which assists families with funeral costs after the death of a credit union member. In the area of non-financial services, it owns and operates a supermarket next door to its main office in Quilalí. The supermarket offers food, consumer goods and agricultural products. The Cooperative also owns a facility for the processing and storage of basic grains for its agricultural members.
With regards to savings, every member must open a savings account with a minimum deposit of approximately $15 when they become a member of the credit union. The Cooperative manages a total of $1 million in member savings, or an average of about $200 per member. Part of the Cooperative’s Strategic Plan for 2007 – 2011 is to increase the level of savings of its members.
About one third of the April 20th Cooperative’s members are women. In our meeting with Cooperative representatives they explained that they do not have a defined program for gender perspective, but they do strive for fair representation for women in the leadership of the credit union. Thus women represent this same ratio (one third) on the various committees and boards which govern the Cooperative.
The April 20th Cooperative is one of twenty members of ASOMIF, the Nicaraguan Association of Microfinance Institutions. (Our study tour had met with ASOMIF in Managua a few days earlier to get an overview of the micro finance industry in Nicaragua.) The Cooperative is also a member of a new federation of agro-industrial Cooperatives in Nicaragua. The Cooperative sees their participation in these spheres as vital, and sees these organizations as the appropriate voice at the national level in regards to the regulatory environment, economic policy, and other political issues that affect savings and loans Cooperatives in Nicaragua. At the credit union level they have not historically seen themselves as having a direct voice in the national political debate.
The Cooperative serves some of the poorest micro enterprise owners, both men and women, in Nicaragua. We were privileged to have the opportunity to walk through the town with Rosa, one of the April 20th Cooperative’s Credit Promoters (loan officers) to meet with some of the borrowers (members) of the credit union. This was one of the highlights of the entire tour for me.
We first met with a tailor, who told us about his small business and how various loans from the credit union had allowed him to buy the cloth he needs to run the business. The income he has generated has allowed him to purchase two more sewing machines and provide employment to at least one other person. The second business owner we visited was a small store owner who operated her neighborhood market out of the front room of her home. As a member of the credit union she has taken out a number of loans to purchase inventory for the store. The third member we visited was a woman who sold coffee and tortillas out of her home, and raised pigs to supplement her family’s income. The final visit in the village itself was to the home of a married couple who were both elementary school teachers. They described to us how difficult it is to survive and raise a family on a school teacher’s income in Nicaragua. They had used credit to make improvements to their home, including a loan for a new brick floor. For our last visit, we traveled up the mountain side on the outskirts of Quilalí to visit a woman who runs a small bakery out of her home, as well as a neighborhood store.
Rosa, the Credit Promoter who accompanied us is a young woman who clearly shares a close relationship with the Cooperative’s members (see following article, page 10), as well as with nearly everyone who passed us in the street. This type of lending clearly takes place in a community where everyone knows each other. It seemed obvious that the April 20th Cooperative is a vital member of this community, and plays an important role in its economy.
The NICA Fund has made a total of six loans in the April 20th Cooperative since July of 2002. The Fund’s latest loan was for $250,000 which brings the amount lent the Cooperative to $450,000. It was inspiring to see how these loans have gone directly into the community to improve the quality of life for members of the Cooperative. It seemed to me that if the NICA Fund could double or even triple its oustanding loans there would still be plenty of demand for that money in Quilalí. In fact this seemed to be the case with each NICA Fund borrower we met. There is still a very large unmet need for micro finance investment in Nicaragua.
I would like to thank WCCN for the opportunity to participate in this tour. It was both educational and inspiring. Your capital is doing very good things in Nicaragua.
Brenda Latvala Pfahnl serves on the Board of the Cooperative Fund of New England (www.coopfund.coop), and participated in the study tour with her son Alex. She maintained a blog about the tour at www.brenda-sisu.blogspot.com.