Global Perspectives | Spring 2009
 

MFI Profile: Unidad de Microfinanzas Arariwa

Arariwa works primarily in the department of Cusco, population 1.2 million, in the central/southeast area of Peru

A new addition to Global Partnerships’ portfolio

is Unidad de Microfinanzas Arariwa (Arariwa). Serving primarily women in the rural and semi-urban areas of southern Peru, Arariwa has been providing the poor with financial services since 1994.

Clients of Arariwa participate in village banks and enjoy regular educational programs in their bi-monthly meetings. A typical village bank will have 10 to 20 members from one neighborhood or geographic area. Members come together to a community gathering spot. Once assembled, the group begins the business of collecting payments

on the loan and takes part in an educational program. Program topics include the importance of creating and maintaining savings, basics of health care, family welfare, business management and financial education.

Clients, like those of Arariwa, have expressed a strong interest in building personal savings. With the support and encouragement of village bank members, women are able to put aside small amounts of money ($1 to $2 per week) that can later be used for items that require a large one-time payment, such as a refrigerator or the purchase of school uniforms. Savings are collected at the village bank meetings throughout the loan cycle (typically three to six months) and distributed back to the members at the end of the loan term.

In addition to the village banking model, Arariwa offers individual loans to select members. With the growth of her business, an entrepreneur may require a substantial loan for a specific purpose such as a new loom for a weaver. Access to these individual loans provides clients with the flexibility they need to build their business while still honoring the village bank methodology.

Arariwa currently provides 16,881 poor families with access to microloans and other financial services. With investments like those from Global Partnerships Microfinance Fund 2008, Arariwa plans to expand its impact and help thousands to help themselves.

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