Creating confidence and taking risks

 

On a recent visit to Colombia, ECLOF International officer George Petty spoke to Cindy Cárdenas at her office in Ciudad Bolívar, south of the capital Bogotá. Cindy is the credit advisor for ECLOF Colombia (COFEP), and she began her conversation with George by telling him more about herself and her work.

I am aged 23 and am studying economics, though my studies have been somewhat delayed because of my full time work with ECLOF. I have been with COFEP for almost three years and work within its nano credit programme. Nano credit in Colombia refers to loans of less than US$100. Most microfinance institutions (MFIs) here lend much higher sums, and several even exceed US$15,000. The average income in Colombia is US$2,020, and 49% of the population lives below the poverty line.

Life, including the economic situation, in Ciudad Bolívar is very hard. People's economic situation is very hard. They have been displaced from elsewhere through violence, and for political, economic and social reasons. Here, all cultures, languages and habits converge. Here, poor people live. There has been much conflict in Ciudad Bolívar but when you live here, when you manage a project that affects people's lives, when you have a vision of what you want to do, then life becomes much more … well, I have lived here for fourteen or fifteen years now and life is very quiet. I have always tried to be active with youth groups and creative communities.

Are there good things about Ciudad Bolívar?

Yes, of course. There are many people who organise themselves: young people, old people, women, men and children. They do this because they are convinced they are the ones who can change things, and that they are responsible for writing their own history, If you can organise yourself in a community like this, you have choices and can create your own tomorrow.

How did you and your family come to Ciudad Bolívar?

My mother, brothers and grandmother came here in 1999 from a village in Cundinamarca - Viota to escape the violence there. My mum, who has always worked as a housemaid, also thought we could improve our economic situation by making the move.

What is this violence of which you speak?

In Colombia, there has been violence for a long time. There are armed groups with different ideologies who want power at all costs. This power war is horrible. In Colombia, it has caused the displacement of many people. Families who feel that their lives are threatened flee and leave everything behind: crops, animals, land, houses. COFEP's nano credit programme focuses on these people. Just open the door and you’ll see that the mountain slopes are full of their improvised “houses”.

As a credit advisor, what do you do?

I must give clear information to old or new clients and help them to fill out their loan application forms. I also try to match certain loans to particular people, and help them to plan the projects they propose to begin. For me, a credit advisor is someone who gives support and who is a partner of the borrowers. I try to be this and help COFEP clients as they run their businesses. Our clients are made up of groups of five people, who all know one another. The groups are based on solidarity; this is not only economic solidarity but also human solidarity. If one member of a group falls, the others are there to help him or her. If one of them has a problem, the others are there to help. Each member of a group can borrow up to 200,000 pesos (US$84), which they must pay back in 12 weekly instalments.

I am also responsible for fieldwork, which means I visit the homes and businesses of clients, and then I organise their documents and write reports on what I have seen and heard. I pass this information on to my boss so that she can submit the necessary requests to the weekly credit committee.

We are the only MFI in Ciudad Bolívar that is this close to the people. From the first, we try to make sure that they understand the requirements and the commitment needed to take out an ECLOF loan. Our work with the people is based on solidarity and trust.

Do you have to say "No" to many people?

Yes, mainly because the people concerned would not be able to make their weekly repayments. They are so poor they would spend their loan on food for their families. However, our programme is inclusive. An example is that in our nano credit programme we have clients who are old and young. There are also women who are heads of their families. Then there are street vendors, and we also give priority to the parents of children with special needs. When we do have to reject an application, we try to be respectful and explain that saying "No" does not mean saying "Never".

It is hard to say "No", but you cannot give people bread for just one day when they need bread for the rest of their life. I have to tell them that COFEP cannot help at the moment but there are other foundations that do make donations.

How many clients do you have?

Numbers have grown rapidly since loans began in August 2004. We began with two groups and now we have 147 representing approximately 800 families. The number of groups continues to grow, and we need more resources to cover new applications and improve our activities with existing clients.

Most MFIs offer minimum one-year loans. We are different because we make three-month loans. In this way, people can pay back their loans quickly. Also, people are very much used to working with what we call agiotistas, loan sharks who collect repayments on a daily basis. These loan sharks use strong-arm methods. If their clients don’t pay they attack them. We now work with these vulnerable people. As they are used to paying back loans quickly they are able to repay their ECLOF loans on a weekly basis. Also, in applying for loans, there are no queues, the paperwork is quick and applicants receive an answer in only eight days. I am fully satisfied with what we do and I am convinced that it is a good way to support a group of citizens. If people perform well, they are granted higher loans if they want them. Clients continue with COFEP because they see that their income increases with a loan. Some began by borrowing 100,000 pesos (US$43), then they applied for 150,000 (US$65), then 200,000 (US$87), 250,000 pesos (US$108), 300,000 pesos (US$130), and 400,000 pesos (US$174). The idea is for our clients to take each next step, and to do so not for us but for themselves. Another result of a group receiving a series of loans is that after such a long time we become friends with our clients, who feel part of the loan programme and of ECLOF.

Have there been any changes in the lives and businesses of your clients?

Yes. A loan in itself is not sufficient to provide them with everything they need but it is something that does give them confidence. We have worked with people who came to us because they could not get loans from other commercial entities as there is a lot of discrimination in Colombia. As these people are considered a high risk for credit, many institutions refuse them. The people themselves often don’t dare to go and talk to these institutions because they’re afraid that people will scream at them and so they lower their head. COFEP, however, considers that loans are not a favour but something that people themselves have earned, and something that should be accessible to all honest people in Colombia.

Many of our clients now have loans of 1 million pesos (US$435), and with that they can buy machines. Their situations have improved because of their loans. I believe in nano credit and that it can help people realise that they can do many things.

Our project helps to create the habits of saving, punctuality, organisation and planning in our clients' lives and businesses. We explain that it is important to keep orderly books detailing sales, purchases and expenses. We believe loans also help increase people's confidence, which, as I have said, can be very low.

Do you see any changes in your clients’ homes?

Yes. For example, take the house of Luis Humberto Santa María, who is a member of the Microrobles solidarity group. His boys' room was made of tinplates, and it was very cold because even the tinplates didn’t completely cover the room. Slowly, however, Luis has been able to build a proper wall and the family is working to upgrade their whole house. The neighbourhood is far from ideal but you can see that the houses of ECLOF clients are better organised and that their standard of living has improved. Another thing that we should consider is that people must build containing walls. Their houses are located on the hillsides and people must reinforce these buildings, and build a special column to connect the basic utilities of gas and electricity. This is all covered by the 200,000 peso loans thatpeople receive.

How does security in the area of Bolívar affect your work? I know that this area has been seriously affected by vandalism, violence and robberies.

We had an incident in 2004. Two armed men entered the office, threatened us and stole programme money. If you live in a high-risk area, there comes a time when you understand that when you handle money, you need certain security measures, so we reorganised and now no longer travel with cash in our pockets. We have also installed a security system in the office.

What drives you to continue working for COFEP when there are risks involved?

In the programmes in which I worked previously, I realised that people were merely promising things. In COFEP, I saw that I would have a more tangible tool. This is the job I always wanted to do. I want to see the result of what I do and now I think that I can offer people something concrete and see the results. This is what I love about working here in COFEP. People believe in their projects and they identify with nano credit. That is very encouraging for us and for me personally; it makes me feel satisfied with my job. Through its nano credit programme, COFEP has been able to reach population groups the other MFIs don’t consider.

Our mission and commitment is to be an agent of transformation, a channel through which many people can change. If we are not aware of this, then Colombia will not change because the transformation needs to be of all of us, and the commitment made by all of us.

I would like people to know that Colombia is not only a country at war but that good things are being done here as well. This is a country where people are working and struggling. These are honest people, who want to progress in life despite the daily difficulties of living.

Finally, I want to add that this nano credit project works because COFEP believes in it, and this enhances its credibility. COFEP is the only agency doing this type of work in Bolívar. I feel privileged to be working in COFEP because “for Cindy to work, everyone must work”. We are all part of the team. Both employees and the COFEP board must identify with the programme. If just one person does not share the same spirit, the project cannot grow and prosper. And the most important thing is that we don’t break our promises to people, as has happened often in the past.

Cindy Cardenas (centre, crouching) and ECLOF Colombia treasurer, Enna Sofia Lemus (centre, standing), with members of two new solidarity groups, to whom Cindy and Enna are about to explain how ECLOF works and can assist them.