Microfinance institutions offer an infusion of money to entrepreneurs who can either give their businesses a much-needed boost or leave them broke and in debt.
When she was a child, Amalia
Aguilar walked with a woven
basket full of apples, oranges
and bananas to sell. She weaved
through the crowded aisles of
La Cancha Market in Cochabamba, the fourthlargest
city in Bolivia. Eventually, Aguilar no longer
wanted to walk the market. Instead, she wanted to
sell a greater selection of fruit. She wanted to be a
licensed vendor with a regular post and a regular
income. She wanted to provide more for her family.
In Cochabamba, the markets teem with women selling fruit. Women selling shirts, pants and sweaters. Women selling deodorant, hairspray and lotion. Women selling imitation Ray Ban sunglasses. Women selling snacks — home baked chips, candy and gum. A woman selling magazines and CDs. Another sells woven alpaca scarves, socks and jewelry. The sidewalks are filled with small posts rented from owners living in cities such as La Paz, 220 miles away.
To achieve her dream of becoming a licensed vendor, Aguilar put her trust in a local commercial bank, applied for a loan and was approved. For a while, she profited and was even able to save some money in a bank account. But Bolivia's economy was unstable and sales began to spoil.
The loan interest added up and sales were down. Aguilar lost all of her savings to the bank and, eventually, the post she worked every day and night.
Aguilar is in the company of many other Bolivian women who search for a way to sustain themselves and their families. Becoming an entrepreneur on credit has become a popular means to that end.
Microfinance proponent Nilima Achwal, a research associate at William Davidson Institute in Ann Arbor, Mich., said entrepreneurs work hard to make their businesses succeed. Once they begin, she said, they envision and execute new ways of improving. People in their position might not think of these things, she said, but once they start earning a profit, they see all the possibilities. Almost always, their standard of living is improved, Achwal said.
"They're not jumping for joy because they still are working really hard, but they are feeding their children better," she said.
In 2008, Achwal was a volunteer for Kiva, a San Francisco-based company that collaborates with microfinance institutions based in Third World countries, including Bolivia. Through its website, Kiva offers people all over the world the chance to invest money in Third World entrepreneurs. The investments are sent to and distributed by microfinance institutions such as Pro Woman, or its Spanish name, Pro Mujer, and Incubator of Productive Micro-businesses, or IMPRO.
Kiva volunteers like Achwal report on the progress of the entrepreneurs to the investors who like to see the effects of their investment. The investors can read stories and view photos of their entrepreneurs' progress.
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