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.
