Letter from Nicaragua

What $2 a day looks like, and what a $100 loan can do

By Margaret Larson, posted March 25, 2009

In early March, Global Partnerships board and staff traveled to Nicaragua where, guided by our top-notch Managua staff, we spent several days seeing firsthand how microfinance has transformed people's lives. Margaret Larson -- board member and Emmy Award-winning broadcast journalist -- posted this account.

In recent months, the U.S. has seen how a "credit freeze" can stop even a strong economy in its tracks. Now imagine a country mired in poverty, individuals living on $1 or $2 a day, struggling with a lack of access to education and health care, and facing the insurmountable hurdle of a perpetual credit crunch.

Three weeks ago, the Board of Directors of Global Partnerships traveled to Nicaragua to witness firsthand the power of microfinance to help people with just these kinds of challenges.

Nicaragua is a beautiful, largely agricultural country of about 5.5 million people. It is also the second poorest nation in the Western Hemisphere, beset by chronic unemployment and underemployment. During our three days "on the ground" in Nicaragua, guided by our Managua staff, we visited our microfinance partners and the borrowers they serve, hearing story after story of how Nicaraguans have transformed their lives with loans as little as one or two hundred dollars. Meeting and talking with these people in their homes, at their farms and businesses reminded all of us on the Board not just about what we do, but why we do it.

We spent time with two microfinance institutions that offer their clients services above and beyond microloans. For example, Pro Mujer Nicaragua offers financial services paired with basic health care and business training. At a morning meeting of a Pro Mujer borrowers group in the city of Leon -- held in a small home with a cement floor, sparse furnishings and a metal roof -- a cheerful group of women, from young moms to grandmothers, quickly dispensed with their weekly loan payments.

They then moved on to their health training, which involved a lively lesson from a nurse about seven steps to a healthier life. When she counseled the women to try to take one day off from work each week to rest, the women looked at one another and seemed unsure if this was possible.

In the course of the afternoon, we took note of how hard these borrowers work, earning a living, caring for children, washing clothing by hand, fetching water, growing food, tending animals. We asked one young mother how she felt about her loan that allowed her to open a small restaurant. "For the first time, it made me feel that someone believed in me," she replied.

The second microfinance institution we visited, FDL, has demonstrated great ingenuity in devising different types of loans. By offering a variety of financial services, FDL is not only helping those living in poverty prosper enough to repay their loans but also giving them the tools to grow their businesses. For example, FDL offers clients technical advice with agricultural loans. If a borrower takes a loan to purchase irrigation equipment, he or she will receive training on which equipment is best for his or her land and how to use the equipment -- setting the client up for success.

We visited a FDL borrower group called "The Fighters," five women whose loans have allowed them to buy a dairy cow and pigs, which they raise together. Income from the business has allowed them to send their children to school. One of the borrower's daughters, nine-year-old Maria, says she hopes to become a doctor. That's what these loans can do.

Over our days in Nicaragua, we met many other borrowers: A young dentist, a clothing merchant who runs a small market stall with her daughter, rural farmers including women, a maker of printed T-shirts, even a young man who's opened a Spanish-English language school serving both local citizens and tourists.

Each person had their own story. Each expressed gratitude and optimism. For those who serve on Global Partnerships' board, it was a time to listen, learn and reflect. It helped us fully appreciate the importance of our mission: to reach more people, to serve the rural poor, and to continue to learn which approaches and combined services are most successful in combating poverty.

We saw firsthand how the availability of small business loans can unlock hard work and human ingenuity, help people find better futures for their children, and allow borrowers to rise above some of the most difficult circumstances imaginable.

Writing by Margaret Larson. Landscape photo at top by Chris Megargee; all other photos by Margaret Larson.

Read other Travelogues from Global Partnerships