After the disbursement of the loans, the Asociación Solidaria Unidos para el Desarollo took a group picture with their loan officer, Ruth Pollak, and Asociación SOLAC's president, Jose Luis Incio Coronado.

Loan Disbursements - Sagrado Corazón de Jesús and Unidos para el Desarrollo

On Friday 11th of December the members of the two village banks, a total of 20 people, received their loans, which ranged from 100 to 400 Nuevos Soles (35 to 140USD). The total loan portfolio amounted to a total of 6,450 Nuevos Soles (2,250 USD). This marked the beginning of a 6 month lending cycle, during which the village banks will have monthly repayment meetings, starting on the 11th of January 2010.

The President of Asociación SOLAC took part in both disbursement meetings, introducing himself to the groups and wishing them, as a group and as individuals, a lot of success for the next six months. The participants then signed a contract between each individual and the organization, and another one determining bylaws for their ASOL. Subsequently, when they received their loans, they were given personal booklets, which include their loan details and dates of the next meetings. Finally we celebrated the opening of the village banks with cake and a soft drink, and took some group photos.

Asociacion solidaria Unidos para el Desarrollo

As planned, the final meeting before the loan disbursement was held in Santa Isabél on the 4th of December. In this meeting three men and seven women formed what we call an ‘Asociación Solidaria’(ASOL) – a village bank – and called it “Unidos para el Desarrollo” (United for Development). They elected a President, a Treasurer and a Secretary for the association and signed their ‘Acta de Constitución’. All members were looking forward to the loan disbursement held on the following Friday 11th.

Change of plans for the training sessions

SOLAC had originally planned for the training sessions to start with the ASOL (Asociación Solidaria – Village Bank) of Unión Perú on Wednesday 2nd of December. However, after AVSI’s supporters visited the community of Santa Isabél on Monday the 30th of November, they required that the training opportunities be offered to all inhabitants of both communities, rather than just to the two ASOLs. Therefore, the beginning of the training sessions had to be postponed to give AVSI and SOLAC time to publicize the training sessions in the two communities and get more people to join that part of the project.

On Wednesday 2nd of December SOLAC and AVSI met the women of the ASOL ‘Corazón Sagrado de Jesús’ anyway to personally explain to them the reasons behind the change of plans, and coordinate with the President of the community, señora Katia Tellos, for a general assembly of the community to be held next week, so to inform the inhabitants of Unión Perú about the opening of this new opportunity. Subsequently, the same process will be followed for the community of Santa Isabél.

Asociación Solidaria Sagrado Corazón de Jesús

On Monday 30th of November, the Village Bank which was coming together in Unión Perú finally became official. They chose three of the youngest women to be the board of directors, the elder ones claiming that they already had experience in these kinds of roles, and it was time for the younger ones to learn.

A brief discussion among them led the group to choose the name ‘Sagrado Corazón de Jesús’ (Jesus’ Sacred Heart) for their Village Bank. This kind of religious names are very common among Village Banks of all MFIs in Peru.

Finally, all members of the group signed the ‘Acta de Constitución’, where they officially declared that they would work together as a group for the common purposes of improving their economic and social situation.

New Village Bank in Santa Isabél

On the 21st of November, the SOLAC microfinance team was informed that some more funding was being deposited by one of our most regular supporters, the French NGO Education World, to help our project along. This funding means that we are able to open the second Village Bank which we were planning to have as part of the Pilot Project, in Santa Isabél de Huachipa.

The following week we thus went to promote the project in the community of Santa Isabél, and organized a meeting for Friday the 27th for all those interested in knowing more about the project. As we had done in Unión Perú, in the meeting we explained the basis of Microfinance, and already has about a dozen people sign up as a group.

We then arranged a second meeting for Monday the 30th with those who had signed up, to explain in detail to them how SOLAC’s microfinance project is going to develop over the next six months. That day, a group of representatives of AVSI and other institutions collaborating with and funding them came to visit the community of Santa Isabél.

After the second meeting with the potential group, we visited them in the next few days to evaluate their economic situation and saving capability. In the mean time, a couple more people joined the group. We arranged to meet again on Friday 4th of December for the first official meeting, where the group will sign the ‘Acta de Constitución’, elect their board of directors, and choose a name for the Village Bank.

Pre-disbursement meeting - Unión Perú

Last week, MF SOLAC finished the evaluation of all the participants of the group that had been formed in Unión Perú. The process allowed us to determine what amount each member could start off with in the first lending cycle.

On Wednesday the 25th of November, MF SOLAC met Prof. García Regál who has been invited by the NGO AVSI to be in charge of the workshops with Unión Perú. Our team took Prof. García Regál to the community where he was able to observe the living conditions of the members of the Village Bank and be introduced to a few women who will participate in the workshops. We also discussed the economic activity of each participant of the Village Bank in Unión Perú so that Prof. García Regál could adapt the workshops sessions to the specific small businesses that the participants are setting up.

On Monday 30th of November, the group will meet again to elect a Board of Directors composed of a President, Secretary, and Treasurer - who will be responsible for coordinating the meetings with SOLAC and promoting the participation of all members - and to sign the 'Acta de Constitución', a document which declares that the group is being formed, with a brief summary of its purposes and the names and signatures of all participants as well as the loan official representing SOLAC - Marta Dormal. The group will have the first workshop with Prof. Raúl García Regál from the Universitá Catolica on Wednesday the 2nd of December, which will be followed by the disbursement of the loans the following week, when the group will officially start its first six-month lending cycle.

Formation of the first Banco Comunal in Unión Perú

On Thursday 12th of November the SOLAC microfinance team held the second meeting with the potential beneficiaries of Unión Perú, which culminated with the formation of the first Asociación Solidaria (ASOL). The group consists of 13 women and 1 man, who all signed up with their personal details and required an amount for their loan.

The meeting was also attended by Jorge Ramos, the general coordinator of the NGO AVSI, who came to present to the participants the content of the workshops on entrepreneurship that their are going to hold before and during the loan term.
After his presentation we came to the conclusion that, whilst the loans will only be given to the members of the newly formed group, the workshops will be open to more people, in order to extend the benefits of the project.

Over the next week, MF SOLAC will proceed to individually evaluating all those who have signed up, to see whether their economic situation will allow them to repay the loans, and exactly what amount they would be able to handle to start off with. Aside from personally visiting the participants and filling socio-economic forms with them, we will also enter their details in Infocorp, a data bank which registers the credit history of anyone who's ever taken out a loan from any institution in Peru.

First meeting with potential beneficiaries

On Sunday 8th of November SOLAC had the first meeting with the potential beneficiaries of Unión Perú. About 20 people attended, with a majority of women, all seeming very interested and enthusiastic about the project.

Marta, who will be the loan official for the first village bank, explained to them what microfinance is, how it works in general, and briefly explained details of how SOLAC’s microfinance project is going to work.
Following, was a Q&A session, where we clarified some points that had remained unclear for the participants.

One of the women was appointed to put together a group of 10 to 15 people, which will meet SOLAC again on Thursday the 12th of November in a meeting where precise details of how the project will be carried out will be explained, such as the terms of repayment, interest rate, and saving rate. On top of this, the NGO AVSI will accompany SOLAC to present the programme of workshops they will hold on entrepreneurship and personal development.

At this next meeting, the potential participants will request a loan amount and leave their personal details, so that the SOLAC team can then proceed to evaluate their economic situation and appoint each one their loan.

Promotion for first Village Bank - Unión Perú

At the moment, SOLAC is promoting and organizing a meeting with the potential beneficiaries of the first Village Bank in the community of Union Perú. The meeting will be held on Sunday the 8th of November in the community’s meeting room, with the aim of explaining the concept of microfinance to the population.



Following that, the people who are interested in the project will be invited to assist a second meeting in which we will explain in more detail SOLAC’s lending method, after which the first group will be formed.

SOLAC has also arranged for the NGO AVSI (www.avsi.org) to carry out the initial workshops as well as the workshops throughout the lending cycle. Together with SOLAC, AVSI is designing a series of workshops that will be adapted to the circumstances of the population of Alto Perú based on the results of our study. The topics covered in the workshops will be entrepreneurship combined with personal development and awareness such as self-esteem, gender, social responsibility, and personal development.

Post-Study Project description

Following the Investigation phase, SOLAC put all the data together and wrote a diagnostic paper to complete the first stage of the project. Based on the results of the study, the Pilot Project will be carried out with two groups of beneficiaries; one group in the community of Unión Perú and another in Santa Isabél de Huachipa.

Beneficiaries

Each pilot group will be comprised of between 10 to 15 people, who will preferably be women, as in the experience of microfinance they have been found to be more responsible borrowers, both in repayment and in using the loan to benefit the family as a whole. Additionally the series of training and workshops which the beneficiaries will take part in are generally of greater interest to women (such as self-esteem workshops).

Loans

Each beneficiary will receive a loan of between 100 and 400 Nuevos Soles (23-92 Euros), depending on their need and their capacity to repay. Reimbursements will take place once a month over a lending period of six months.

Workshops

The loans will be complemented by a series of other services. There will be six training and workshop sessions on business skills and personal development and awareness throughout the entire lending cycle. We also decided to start with three workshop sessions before the disbursement of the loans, with the aim of developing a comfortable environment and strong group dynamic within the group and between the group members and SOLAC before the disbursement of the loans.

Investigation : July – October 2009

Asociación SOLAC carried out a study to determine key factors needed to establish a microfinance system. The study includes information on the whole district of Lurigancho-Chosica, details on the area of Alto Peru, and more specifically data collected on the socio-economic situation of the families living in the three communities studied: Santa Isabél de Huachipa, Unión Perú and Santa Crúz de Huachipa. Interviews, focus groups and questionnaires were carried out to survey the specific economic, social, educational and health conditions of these families.

Meetings with Board of Directors and assemblies

Before starting the study, SOLAC arranged meetings first with the Board of directors of each community and then with the assemblies to introduce the association to the population and to inform them about the study. During the meetings, we explained the purpose of the study and the idea of the microfinance project, as well as asked for their collaboration during the door to door questionnaires.

Focus Groups

SOLAC conducted six focus groups with the population of Alto Perú. The purpose of these focus groups was to understand the reality of the area from the perspective of the local population, as well as to help us design the questionnaires to collect data on the communities. Two focus groups took place with teachers from the primary school and the kindergarten. We discussed the main issues affecting the academic development of the children of Alto Perú, as well as the problems the school is facing in terms of funding to ameliorate its facilities and the materials for the students.

In addition four focus groups were organized with the comedores (community canteens) of the three communities. Each community has at least one comedor which is run by ten to twenty women. These women take turns to prepare lunch in large quantities, which they then use to feed their families and sometimes sell to others for a very low price. Sometimes they receive funds from the state but usually they put money together and do a big shopping for the entire week. During the focus groups, women were asked to discuss the main characteristics of the community such as the main occupations, the quality of the community’s health centre and their children’s education.

Saturday workshops

SOLAC was invited to participate to a Saturday workshop that a woman from Santa Cruz de Huachipa, señora Estela, organizes every week in her house for all the women of the 3 communities. During these sessions, the women work together to make scarves, hats and jumpers, either for their families or sometimes to sell them. Each woman contributes with her skills, the old ones usually teach the younger ones how to knit. The women are not selling many of their products yet, and some of them explained that the main problem was the lack of capital to invest in the machineries and the material.

Interviews at the Clinic Alto Perú

The people from the communities of Alto Peru visit the rural clinic of the area for treatment and family planning. The clinic is run by only one doctor and four staff. SOLAC interviewed all of them as well as some patients regarding the infrastructure of the clinic, the most common illnesses that are found, and other issues affecting the centre. One of the main issues discussed was the most common illnesses treated at the clinic. These are usually caused by the poor living conditions of the population of Alto Perú, particularly poor nutrition, the extensive amount of dust in the air as well as the pollution from the factories, and the fact that the only water they have access to is contaminated.

Municipality

SOLAC visited the municipality to collect information on the whole district of Lurigancho-Chosica. They provided us with zoning plans of Alto Perú (Planos de Catastro), the list of local initiatives and Associations (Organización de base), and the development plan (Plan de Desarrollo) which explains the goals the municipality intends to complete by 2010. We also interviewed the mayor, señor Luis Bueno Quino, about the main issues affecting the district.

Door to door questionnaires

Following the interviews and the focus groups, SOLAC had gathered enough information to design the questionnaires to interview representatives of a sample of households from the three communities. The aim of the questionnaires was to collect information that would tell us which community had the highest proportion of people that fit our profile of ideal beneficiary of the project, whilst not giving any premature hope to the inhabitants of any one of the three communities. The questionnaires mainly focused on collecting information about the interviewee’s and their partner’s occupation, the infrastructure of their house, and their credit history. In addition, we also asked the interviewees other basic general descriptive information about themselves and their families: their sex and age, how many people live in their house, how many of these people contribute to the family’s economy with an income, and which school the children of the household go to. The latter information was collected with the aim of giving us a wider socio-economic perception of the communities, whilst the former was meant to differentiate among the communities which ones would most benefit from the microfinance project.

The aim was to interview 50% of the households in each community. SOLAC interviewed 114 people in total: 43 in Santa Isabel de Huachipa, 39 in Unión Perú, and 32 in Santa Crúz de Huachipa. We mainly interviewed women (79% of the sample) since they are the ones who usually stay in the house during the day and who will be the main beneficiaries of the microfinance project.

Pilot Project Timeframe

The aim of the Microfinance Pilot Project is to set up a long term Microfinance Programme after the evaluation of this Pilot Project. It is extremely important to implement the Pilot Project to see exactly how the programme could work at the top of its potential and thus benefit the population of Alto Peru the most.

The Pilot Project is being carried out in three stages, each of them crucial to the successful outcome of the project and subsequent implementation of the programme:

1. Investigation (July – October 2009)

We started with the investigation phase of our project in July 2009, which included meetings and interviews with representatives of the communities, medical staff and teachers, the municipality and organisations working in the area, as well as a door to door questionnaire with the families of the communities. SOLAC is currently putting all the data together and writing a diagnostic paper to complete the first stage of the project.

2. Implementation (November 2009 – June 2010)

During the Implementation phase, SOLAC will set up two village banks, which will benefit a total of 20 to 30 people. We will provide four different services to the beneficiaries; an individual loan of 100 to 400 Nuevos Soles (23 to 92 Euros), workshops and training sessions on budget management and personal development and awareness, the promotion of saving and networking opportunities. Meetings with the village banks will take place once a month for a period of 6 months.


3. Evaluation (February – June 2010)

Throughout the implementation stage the Project will be continuously evaluated to make necessary readjustments for the future Programme. In addition by the end of February 2010, we will start evaluating the success of the project until June 2010, and outlining the steps that will be taken subsequently. The Pilot Project will end in June 2010, after which the Microfinance Programme will commence with a methodology based on the evaluation of the Project. The Programme will aim to benefit between 80 and 100 families of the communities of Alto Peru.