Microfinancing in Oaxaca, Mexico, Aids Teotitlan Del Valle, Accepts Tourist Charitable Donations
Last year Maria was a pieceworker in Teotitlan del Valle earning 5 - 10 pesos for each simple apron she sewed from a roll of cotton print fabric supplied by her patron.
Now she's a businesswoman selling elaborately embroidered aprons to retailers in a nearby town marketplace.
A couple of years ago Juanita, from the same Oaxacan town, was making almost nothing selling soda pop and gum out of a family-owned retail shop.
Today she runs a profitable crafts outlet full of woolen rugs, purses and wall hangings, and her daughter's hand-made jewelry.
Both these woman have succeeded in business as a result of microfinancing through Fundacion en Via.
Fundacion En Via ("En Via") is a non-profit microfinance organization responsible for several similar success stories since 2009.
En Via relies on $50 contributions from tourists visiting the south central Mexico city of Oaxaca, in addition to donations of their time and expertise.
To a more limited extent it's funded by the generosity Mexicans.
The organization is based on two premises: 1) Native women In Oaxacan towns who have a trade, talent or aptitude, and the desire to succeed, should not be held back from realizing their potential for themselves and their families as a consequence of a lack of training and business knowledge - nor as a result of an average cost of borrowing of 70% per annum [interest rates in Mexico at times reach as high as 150%].
2) Many visitors to Oaxaca, both tourists in the city for a week or two as well as those interested in spending longer periods of time in the region, look for worthy charitable causes to which they can contribute modest sums of money, and / or their time and expertise.
This is particularly so when it includes an opportunity to meet the beneficiaries of their generosity and learn about their cultural traditions through touring their towns and being introduced to them and their families.
Accordingly, by redirecting funds to the local community En Via is creating sustainable tourism.
Fundacion En Via: How It Works Fundacion En Via is operated out of premises located at Instituto Cultural de Oaxaca.
Carlos Hernandez Topete and Emily Berens co-founded the program in 2008, and got it underway the following year.
There are only two paid employees; a full - time administrative co-ordinator and a managing-director.
The program is otherwise run by volunteers who do one or more of drive, translate, assist with web design and related promotional matters for both the program and for the participating borrowers, liaise with recipients and donors, and give English and business classes to the women.
Each donor, mainly visitors to Oaxaca, pays $50 into the program.
In exchange for making a $50 donation, each donor is encouraged to spend a day in the town in which the women reside, as part of a group excursion.
The purpose of the trip is to learn a little about the community, and to meet some of the women and their families so as to gain a better understanding of both how the borrowed money is utilized and the resultant positive impact.
The women repay an initial loan of 1300 pesos in equal payments over the course of 10 weeks.
Once a loan is repaid the borrower is entitled to a second and then subsequent loans, provided the need is for a legitimate business purpose supported by the program.
The second loan is for 2000 pesos, the third for 3000 pesos.
Further loans can be for 3000 pesos, 4000 pesos, or such other amount as En Va deems appropriate under all of the circumstances.
Similarly, repayments schedules of these subsequent loans can vary depending on the amount and more general state of affairs.
All loans are interest free.
The entirety of each initial donation is used to provide first loans to program participants.
Upon repayment, a small portion of the repaid funds is used for operating costs and for further loans.
Proceeds are therefore segregated into two parts; the operating portion, and a trust fund used to make interest-free loans to the women.
Loans are provided to only women.
Statistics have shown than women are more likely than men to spend for their benefit of their families, and otherwise comply with the program's rules.
Each recipient is a member of a group comprised of three borrowers.
The group is made up of women who know and trust each other.
People tend to work better with others with whom they are already acquainted.
This concept works because the women can offer advice and support to one another, and call on one another in the event of having difficulty making a loan payment.
The En Via screening process is designed to maximize the likelihood that the women who participate in the program succeed in their business ventures and comply with repayment schedules (there have been only three defaults from a total of approximately 350 loans; in each case non-compliance has arisen from circumstances beyond the women's control).
Women initially learn about En Via through word of mouth.
Meetings are arranged to enable them to more fully understand the program's workings.
The women then attend a question and answer session with En Via administration.
Once a consensus to proceed is reached, arrangements are put in place for the advancement of funds and repayment.
There is ongoing support.
As a prerequisite for receiving a loan, each woman must agree to receive two groups of donors in the course of touring their town.
Funds are thereafter advanced.
In this way donors have the opportunity to meet with the women and their families in their homes and business environments.
Since the program has concentrated on women in the rug weaving town of Teotitlan del Valle (it has recently expanded into Diaz Ordaz, a smaller village with fewer economic opportunities), and most loans are related to wool and weaving, tourists learn about the rug making process and are provided with buying opportunities in the course of the visit.
Touring Teotitlan del Valle with Fundacion En Via After a 40 minute orientation session at the Instituto in downtown Oaxaca, a group of donors, including two Mexican women from Morelia, Michoacan, and three En Via workers, hop into a touring van and head to Teotitlan del Valle.
The group first stop is at the town church alongside the marketplace, where one of the workers, Samantha, explains a little about the town, its people and their economic activities, education and the system of local government.
"We always need volunteers to work with us, although naturally our donors are the financial backbone of the program," Samantha stresses as we walk to our first workshop.
"We offer English lessons; and a few months ago we began giving business classes to those interested," she continues.
"As long as visitors will be in Oaxaca for at least a month they can volunteer to come out to the town twice a week to teach English; and if they plan to be in the city for at least three months we can train them to accompany donors into the town, translate, and assist the project in other ways including helping with business and marketing suggestions.
Our ability to offer and build on our programs depends on our volunteers.
" Rosa the Rug Weaver We enter the combined home and workshop of Rosa and her family.
Rosa demonstrates how she cards and spins wool.
Family members are milling about, going about their daily activities including dying yarn using natural substances.
Rosa explains the use of pomegranate, pecan, the medicinal herb known as pericn, and of course cochineal, the minute insect which when dried and ground into a powder yields tones of red, pink, orange and purple.
Rosa used the proceeds of her first loan to buy raw wool and cochineal, one of the most expensive products used for creating colors.
She's receiving our group so she'll be eligible for a second loan, this one so she can buy a sturdy dolly.
With the dolly she'll be able to take her rugs to and from the town handicraft market without imposing on family members.
By making just one trip to the market in the morning she'll save time and be able to set up her stall much quicker, reducing the likelihood of losing that first sale of the day.
Clara The Ham & Cheese Market Vendor While walking to our next stop Samantha explains that loans are not just for the rug business: "We gave a first loan, 1300 pesos, to a woman named Clara, in the meat and produce market so she could increase her inventory of cheese.
That helped her to improve sales.
She then received the 2000 peso loan so she could buy a meat slicer.
Almost everyone wants their ham sliced.
So now she sells both meat and cheese at her stall.
Clara used the 3000 peso loan to buy a fridge.
Until she got the fridge she was buying meat and cheese every day or two, and each time she was paying a delivery charge.
Now she's eliminated that expense, so her profit has increased.
She's now operating at an optimum level.
" How Juanita Began, Before Having Her Own Storefront Before Juanita began running her handicrafts store she would sell the odd rug out of her sister-in-law's shop next door.
She didn't have capital to buy wool to open up a business of her own.
After her third loan she had purchased enough wool and woven enough rugs to switch from selling pop and gum to begin filling her own rug store.
Juanita is now on her sixth loan, and with each additional loan has been able to better stock her shop including having a broader diversity of product.
Juanita is one of the graduates of the six week business course offered by En Via.
Juanita's daughter obtained her own loan through En Via, enabling her to buy tools and materials to make jewelry.
Maria The Apron Maker We then learn how Maria went from sewing someone else's material into aprons for 5 - 10 pesos, to earning a 40 - 45 peso profit from wholesaling her own fully embroidered aprons.
Maria had a sewing machine, but never enough money to buy material, so she was restricted to doing piecework.
With the proceeds of her first loan she bought material so she could make her own aprons.
She would then send them out for embroidering by someone who had a specialty sewing machine, get them back, and then wholesale them.
With her second loan Maria wants to buy the more sophisticated machine so she'll be able to do all of the work in-house, and thus further increase her profit.
Gloria Aspires To Having Her Own Retail Rug Business Gloria's story is somewhat similar.
Her patron used to give her spun, dyed yarn.
She would make rugs and receive a modest sum for each finished product.
She had the skill set, and the loom, but not the materials.
With the proceeds of her first loan she bought wool and dyes.
She was then able to make rugs on her own, and sell them to the large outlets near the highway which retail to tourists arriving on buses for weaving and dying demonstrations.
She sells small rugs to these casas grandes for 200 pesos if she's lucky, and they double or triple.
But she earns more this way than doing piecework.
And with her next loan she'll buy more material, then additional equipment, and hopefully within a year she'll have enough stock on hand to be able to find her own means of retailing.
Our Tour Concludes with Lunch - And Another Success Story We stop at a restaurant for lunch on our way out of town, our eighth and final visit.
I point to about 20 stacked up beer cases.
"Do you think they're full or empties," I ask.
"I'm not sure," Samantha replies, "but it's because of our second loan that the restaurant now carries beer.
" The third loan to the quaint, spacious eatery was used to construct a new laminated metal roof.
The old one was badly rusted and water would seep through during rainy season.
Part of the restaurant could not be used year round.
The restaurant is now able to easily accommodate groups, like ours from En Via; a shiny new roof to shade us from the sun, and just as importantly a cold one to go along with our tacos, tlayudas, soups and salads.
Why Participate in Fundacion En Via The assistance which En Via provides to townspeople is not otherwise available to them.
The individuals selected to participate are streetwise enough to recognize that borrowing at exorbitant rates of interest, illegal in many Western countries, is imprudent.
Many are initially leery of the program, but those who apply and are accepted eventually come to realize the value of the opportunity they have been given.
Juana was one of the first loan recipients, some three years ago: "When Carlos [the program co-founder] first approached me, I didn't believe it, and I had my doubts.
But look at what Fundacion En Via has done for me and my family.
" Juana's gratitude is echoed in the warmth and welcoming nature of each and every loan recipient visited.
On the tour there's been no hard sell of anything.
The women recognize that En Via is giving them a new lease on life, and that's more than enough for them.
When was the last time any of us has received such heartfelt and instant appreciation for giving so little?
Now she's a businesswoman selling elaborately embroidered aprons to retailers in a nearby town marketplace.
A couple of years ago Juanita, from the same Oaxacan town, was making almost nothing selling soda pop and gum out of a family-owned retail shop.
Today she runs a profitable crafts outlet full of woolen rugs, purses and wall hangings, and her daughter's hand-made jewelry.
Both these woman have succeeded in business as a result of microfinancing through Fundacion en Via.
Fundacion En Via ("En Via") is a non-profit microfinance organization responsible for several similar success stories since 2009.
En Via relies on $50 contributions from tourists visiting the south central Mexico city of Oaxaca, in addition to donations of their time and expertise.
To a more limited extent it's funded by the generosity Mexicans.
The organization is based on two premises: 1) Native women In Oaxacan towns who have a trade, talent or aptitude, and the desire to succeed, should not be held back from realizing their potential for themselves and their families as a consequence of a lack of training and business knowledge - nor as a result of an average cost of borrowing of 70% per annum [interest rates in Mexico at times reach as high as 150%].
2) Many visitors to Oaxaca, both tourists in the city for a week or two as well as those interested in spending longer periods of time in the region, look for worthy charitable causes to which they can contribute modest sums of money, and / or their time and expertise.
This is particularly so when it includes an opportunity to meet the beneficiaries of their generosity and learn about their cultural traditions through touring their towns and being introduced to them and their families.
Accordingly, by redirecting funds to the local community En Via is creating sustainable tourism.
Fundacion En Via: How It Works Fundacion En Via is operated out of premises located at Instituto Cultural de Oaxaca.
Carlos Hernandez Topete and Emily Berens co-founded the program in 2008, and got it underway the following year.
There are only two paid employees; a full - time administrative co-ordinator and a managing-director.
The program is otherwise run by volunteers who do one or more of drive, translate, assist with web design and related promotional matters for both the program and for the participating borrowers, liaise with recipients and donors, and give English and business classes to the women.
Each donor, mainly visitors to Oaxaca, pays $50 into the program.
In exchange for making a $50 donation, each donor is encouraged to spend a day in the town in which the women reside, as part of a group excursion.
The purpose of the trip is to learn a little about the community, and to meet some of the women and their families so as to gain a better understanding of both how the borrowed money is utilized and the resultant positive impact.
The women repay an initial loan of 1300 pesos in equal payments over the course of 10 weeks.
Once a loan is repaid the borrower is entitled to a second and then subsequent loans, provided the need is for a legitimate business purpose supported by the program.
The second loan is for 2000 pesos, the third for 3000 pesos.
Further loans can be for 3000 pesos, 4000 pesos, or such other amount as En Va deems appropriate under all of the circumstances.
Similarly, repayments schedules of these subsequent loans can vary depending on the amount and more general state of affairs.
All loans are interest free.
The entirety of each initial donation is used to provide first loans to program participants.
Upon repayment, a small portion of the repaid funds is used for operating costs and for further loans.
Proceeds are therefore segregated into two parts; the operating portion, and a trust fund used to make interest-free loans to the women.
Loans are provided to only women.
Statistics have shown than women are more likely than men to spend for their benefit of their families, and otherwise comply with the program's rules.
Each recipient is a member of a group comprised of three borrowers.
The group is made up of women who know and trust each other.
People tend to work better with others with whom they are already acquainted.
This concept works because the women can offer advice and support to one another, and call on one another in the event of having difficulty making a loan payment.
The En Via screening process is designed to maximize the likelihood that the women who participate in the program succeed in their business ventures and comply with repayment schedules (there have been only three defaults from a total of approximately 350 loans; in each case non-compliance has arisen from circumstances beyond the women's control).
Women initially learn about En Via through word of mouth.
Meetings are arranged to enable them to more fully understand the program's workings.
The women then attend a question and answer session with En Via administration.
Once a consensus to proceed is reached, arrangements are put in place for the advancement of funds and repayment.
There is ongoing support.
As a prerequisite for receiving a loan, each woman must agree to receive two groups of donors in the course of touring their town.
Funds are thereafter advanced.
In this way donors have the opportunity to meet with the women and their families in their homes and business environments.
Since the program has concentrated on women in the rug weaving town of Teotitlan del Valle (it has recently expanded into Diaz Ordaz, a smaller village with fewer economic opportunities), and most loans are related to wool and weaving, tourists learn about the rug making process and are provided with buying opportunities in the course of the visit.
Touring Teotitlan del Valle with Fundacion En Via After a 40 minute orientation session at the Instituto in downtown Oaxaca, a group of donors, including two Mexican women from Morelia, Michoacan, and three En Via workers, hop into a touring van and head to Teotitlan del Valle.
The group first stop is at the town church alongside the marketplace, where one of the workers, Samantha, explains a little about the town, its people and their economic activities, education and the system of local government.
"We always need volunteers to work with us, although naturally our donors are the financial backbone of the program," Samantha stresses as we walk to our first workshop.
"We offer English lessons; and a few months ago we began giving business classes to those interested," she continues.
"As long as visitors will be in Oaxaca for at least a month they can volunteer to come out to the town twice a week to teach English; and if they plan to be in the city for at least three months we can train them to accompany donors into the town, translate, and assist the project in other ways including helping with business and marketing suggestions.
Our ability to offer and build on our programs depends on our volunteers.
" Rosa the Rug Weaver We enter the combined home and workshop of Rosa and her family.
Rosa demonstrates how she cards and spins wool.
Family members are milling about, going about their daily activities including dying yarn using natural substances.
Rosa explains the use of pomegranate, pecan, the medicinal herb known as pericn, and of course cochineal, the minute insect which when dried and ground into a powder yields tones of red, pink, orange and purple.
Rosa used the proceeds of her first loan to buy raw wool and cochineal, one of the most expensive products used for creating colors.
She's receiving our group so she'll be eligible for a second loan, this one so she can buy a sturdy dolly.
With the dolly she'll be able to take her rugs to and from the town handicraft market without imposing on family members.
By making just one trip to the market in the morning she'll save time and be able to set up her stall much quicker, reducing the likelihood of losing that first sale of the day.
Clara The Ham & Cheese Market Vendor While walking to our next stop Samantha explains that loans are not just for the rug business: "We gave a first loan, 1300 pesos, to a woman named Clara, in the meat and produce market so she could increase her inventory of cheese.
That helped her to improve sales.
She then received the 2000 peso loan so she could buy a meat slicer.
Almost everyone wants their ham sliced.
So now she sells both meat and cheese at her stall.
Clara used the 3000 peso loan to buy a fridge.
Until she got the fridge she was buying meat and cheese every day or two, and each time she was paying a delivery charge.
Now she's eliminated that expense, so her profit has increased.
She's now operating at an optimum level.
" How Juanita Began, Before Having Her Own Storefront Before Juanita began running her handicrafts store she would sell the odd rug out of her sister-in-law's shop next door.
She didn't have capital to buy wool to open up a business of her own.
After her third loan she had purchased enough wool and woven enough rugs to switch from selling pop and gum to begin filling her own rug store.
Juanita is now on her sixth loan, and with each additional loan has been able to better stock her shop including having a broader diversity of product.
Juanita is one of the graduates of the six week business course offered by En Via.
Juanita's daughter obtained her own loan through En Via, enabling her to buy tools and materials to make jewelry.
Maria The Apron Maker We then learn how Maria went from sewing someone else's material into aprons for 5 - 10 pesos, to earning a 40 - 45 peso profit from wholesaling her own fully embroidered aprons.
Maria had a sewing machine, but never enough money to buy material, so she was restricted to doing piecework.
With the proceeds of her first loan she bought material so she could make her own aprons.
She would then send them out for embroidering by someone who had a specialty sewing machine, get them back, and then wholesale them.
With her second loan Maria wants to buy the more sophisticated machine so she'll be able to do all of the work in-house, and thus further increase her profit.
Gloria Aspires To Having Her Own Retail Rug Business Gloria's story is somewhat similar.
Her patron used to give her spun, dyed yarn.
She would make rugs and receive a modest sum for each finished product.
She had the skill set, and the loom, but not the materials.
With the proceeds of her first loan she bought wool and dyes.
She was then able to make rugs on her own, and sell them to the large outlets near the highway which retail to tourists arriving on buses for weaving and dying demonstrations.
She sells small rugs to these casas grandes for 200 pesos if she's lucky, and they double or triple.
But she earns more this way than doing piecework.
And with her next loan she'll buy more material, then additional equipment, and hopefully within a year she'll have enough stock on hand to be able to find her own means of retailing.
Our Tour Concludes with Lunch - And Another Success Story We stop at a restaurant for lunch on our way out of town, our eighth and final visit.
I point to about 20 stacked up beer cases.
"Do you think they're full or empties," I ask.
"I'm not sure," Samantha replies, "but it's because of our second loan that the restaurant now carries beer.
" The third loan to the quaint, spacious eatery was used to construct a new laminated metal roof.
The old one was badly rusted and water would seep through during rainy season.
Part of the restaurant could not be used year round.
The restaurant is now able to easily accommodate groups, like ours from En Via; a shiny new roof to shade us from the sun, and just as importantly a cold one to go along with our tacos, tlayudas, soups and salads.
Why Participate in Fundacion En Via The assistance which En Via provides to townspeople is not otherwise available to them.
The individuals selected to participate are streetwise enough to recognize that borrowing at exorbitant rates of interest, illegal in many Western countries, is imprudent.
Many are initially leery of the program, but those who apply and are accepted eventually come to realize the value of the opportunity they have been given.
Juana was one of the first loan recipients, some three years ago: "When Carlos [the program co-founder] first approached me, I didn't believe it, and I had my doubts.
But look at what Fundacion En Via has done for me and my family.
" Juana's gratitude is echoed in the warmth and welcoming nature of each and every loan recipient visited.
On the tour there's been no hard sell of anything.
The women recognize that En Via is giving them a new lease on life, and that's more than enough for them.
When was the last time any of us has received such heartfelt and instant appreciation for giving so little?