Extension of our Microfinance Pilot Project

Due to the successful running of the two original ASOLs and to the high demand for participation from other people in the communities, we have decided to extend our pilot project to give approximately another 24 people in the area the opportunity to benefit from a microfinance scheme, as well as to offer our two initial groups the option of entering a second cycle of the project, with the opportunity of receiving higher loans.

In May we started talking to people in Santa Isabél, Unión Perú and Santa Crúz de Huachipa, to see who was interested in forming a new group. By the end of the month we had already formed two new groups, one in Santa Crúz de Huachipa and another in Santa Isabél.

Approved funding for the extension of our project by the Austrian Embassy in Lima

We are very pleased to announce that our application for funding from the Austrian Embassy in Lima for our extension of the Microfinance Project in Alto Peru has been approved. At a meeting with the Ambassador, Dr. Andreas Melán, and with Mrs. Karin Eckert, responsible for cultural issues and international cooperation, which took place at the end of May, we were told that the Embassy was happy to provide funding to our project and cover the remaining budget.

We would like to take this opportunity to sincerely thank the Austrian Embassy in Lima, Education World 86, as well as our other donors for allowing us to carry out our work!

New Training Sessions

As previously mentioned, we have decided to carry out the next training courses on entrepreneurship ourselves. Throughout April and May we have been creating a syllabus together with INCUBA Networks, using their manual as a basis to create one that has been greatly adapted to the requirements of the people in Alto Perú.

As we are strongly emphasizing the notion that a microfinance project is not only about the loans themselves, and recognizing that a training programme will develop a strong group atmosphere and a good relationship with the loan officers, we have designed four initial sessions which are compulsory for participants in order to receive a (or their next) loan.

Syllabus:

Session 1:
Understanding the environment and recognizing one’s own qualities as an entrepreneur

Session 2:
Brainstorming various business ideas, out of which three are selected to be put through an internal and external filter, in order to see which business idea is most viable. At the end of the session the participants decide what business they would like to invest their loan in.

Session 3:
Analyzing the market and the four Ps of the chosen business idea.

Session 4:
Bugdet (and breakdown of what the loan will be invested in)

The two new ASOLS:

ASOL “Las Triunfadoras” (Santa Isabél) and ASOL “Karin” (Santa Crúz de Huachipa)

After receiving an introductory session on what the Microfinance project consists of, the two newly formed groups, “Las Triunfadoras”, consisting of seven women and one young man, and “Karin”, which consists of six women, began with our four–session training course. The classes were very beneficial, both to the individual members of the team to support and guide them with their business ideas, as well as for the strengthening of the group dynamics and the relationship with the loan officer. By the end of the four sessions there had been a clear change in the level of comfort and trust between the group members.

The loan officers of each group then went to visit each person individually to fill in a questionnaire and discuss their business idea and the investment of the loan. Each case was then discussed at the office before the papers were prepared for the disbursements.

The disbursement of ASOL “Karin” took place on 7th June in Santa Crúz. Mrs. Karin Eckert from the Austrian Embassy took this opportunity to visit our project on site. She had the opportunity to meet the women, visit one of their sewing workshops and participate at the disbursement meeting. The group decided to name their ASOL after her, as a thank you for providing the funding required for the project.

The disbursement of ASOL “Las Triunfadoras” was held the following day (8th June) and was celebrated with soft drinks and cake. Group photos were taken and the members stayed longer to chat.

ASOLs “Sagrado Corazon de Jesus” and “Unidos para el Desarrollo”

Our two ASOLs which started in December last year have completed their fifth and sixth repayment meeting (on 11th May and 11th June respectively), and have herewith completed their first lending cycle. Although we have had two women with difficulties repaying the fifth loan, they have all managed to repay the whole amount by the end of the loan period. The repayment rates of the two groups have therefore been 100 % for the first cycle.

Almost all group members have been showing much interest in continuing with the project and were eager to receive the second cycle of the loans, in which they are entitled to a maximum of 800 PEN (around 280 USD) – depending on their repayment capacity.

Sagrado Corazon de Jesus has completed their four training sessions and have had their disbursement on 21st June. They are 11 members – all nine who have participated in the old cycle plus two new members (who have been accepted by all group members, but are, according to SOLAC rules, only entitled to a maximum loan of 400 PEN).

Unidos para el Desarrollo insisted on completing their initial classes before 11th June and therefore had their disbursement on the same day as the last repayment meeting. The ASOL consists of nine people in this second cycle – two members have left and a new participant has joined. The loan portfolio of this group is 4,450 PEN (approx 1,565 USD).

Third and Fourth repayment meetings, and Education World 86 visit

We have had two more successful repayment meetings with the two ASOLs of Unión Perú and Santa Isabél. At the last one our visitors from the French NGO Education World 86, who arrived on the 2nd of April, attended the meeting to get to know the members of the ASOLs and see how SOLAC’s Microfinance programme is running.

Here are the thoughts of Melinda Tims, EW's secretary:

"Education.world-86, Solac´s sister NGO in France, has provided the venture capital needed to start up 2 microcredit groups in the Huachipa slums outside Lima. The French NGO has also had 3 members working in Peru since early April, working both with the microcredit team and with the local school in the same area ; this experience has provided a first-hand opportunity to see the work in progress. The results have been outstanding.

The Solac microcredit team brings together talent, intelligence, great commitment, and outstanding preliminary results. The first 2 women´s economic self-help groups have completed their business training workshops and are half way through their repayment cycle, and 2 new groups are currently being formed. The ground work for all of this has been carefully thought out and the team has been highly successful in trouble-shooting so as to avoid any pitfalls. This endeavor is an ongoing process, so much obviously remains to be done in this impoverished area in terms of integrated economic development. EW enthusiastically supports all this work in the field and extends its hearty congratulations for all that has been accomplished."

EW Secretariat - Dr. Melinda Tims, University of Tours (France)

End of training sessions with AVSI and planning of new course

On Saturday 10th of April we held the last of the series of eight training sessions on entrepreneurship ogranized in cooperation with the NGO AVSI for the members of the ASOLs of Unión Perú and Santa Isabél. Even though this course has come to an end, the cooperation between SOLAC and AVSI will continue in the form of monthly sessions where a professor hired by AVSI will be visiting the members of the ASOLs to follow up the progress of their micro-businesses and give them advice.

On the other hand, the Microfinance team is now in the planning stages of a new training course which will be offered to the members of the existing ASOLs and to the future members of the new ASOLs that will be formed in May. This training course will be carried out by SOLAC’s loan officers, who will start to be trained to give this course by INCUBA Network (http://www.incubanetwork.com/index.php), an organization which specializes in giving support and training to micro entrepreneurs.

SOLAC decided that it would be best for the members of the ASOLs to be receiving the entrepreneurial training directly from their loan officers – i.e. the Microfinance team – since the latter know them personally and can therefore better serve for their needs.

First Training session on Entrepreneurship - 16.02.10

As planned, the first training session on entrepreneuship took place yesterday afternoon, 16thof February, in Unión Peru’s communal room. AVSI accompanied the teacher who was coming to Alto Perú for the first time and introduced him to the beneficiaries. At the beginning of the class each person was asked to talk briefly about their business, after which the whole class discussed with the teacher the main concepts of entrepreuneuship i.e. What are the main characteristics of an entrepreneur? The class ended with a very interesting activity that aimed at stimulating the participants’ creativity to find new business ideas.
As mentioned before, a few of our beneficiaries told us that they will not be able to make it to the classes as they were at work. They explained that attending the course twice a week would be too difficult for them to arrange but that they would try their best to participate once a week. Due to this lack of availability, only two women from the ASOL Sagrado Corazón de Jesús and four members of Unidos para el Desarrollo attended the meeting. In addition four other people from Unión Perú who are not part of the Microfinance programme but have a small business in the area participated. Consequently, the teacher together with the participants decided to schedule classes only once a week on Tuesdays. SOLAC’s loan officers will have a meeting with their respective ASOLs on Friday to discuss this new alternative with the groups and ensure that all beneficiaries will get the opportunity to participate in the course.

Second repayment meetings - 11.02.10

The second repayment meetings were held last night at both communities. Again repayment went smoothly and the women were happy to attend and chat. We informed them about the course they will be starting on Tuesday which will take place for the members of both groups together. The majority seemed interested in this, although some people have already informed us that they will not be able to attend as they will be at work. This time, different to all others, we held the meeting with “Unidos Para el Desarrollo” outdoors. This turned out to be very nice, as it created a different, more casual relationship between all. Also, we have printed out photos that we have been taking at meetings and brought it to the meeting so that we were able to make a poster all together, which will be put up on the wall of the communal room of the community.

Training sessions starting Tuesday 16th

After a long delay in start, the members of both our ASOLs will be starting a course on entrepreneurship this coming Tuesday. Sessions will be held twice a week (Tuesdays and Thursdays) for two and a half hours each and will last for a month. Unfortunately, we were told by a few of our beneficiaries that they will not be able to make the classes, as they are at work. We are going to try our best to change the hours, so that all can attend. The syllabus, which we have been working on together with the organization which is organizing this course (AVSI), does look very promising - we therefore do expect the members who are available to participate.

New Funding Received

About a week ago we were informed that we will be receiving new funding for your project from the French NGO (Education World 86) which has been supporting us throughout this, as well as past SOLAC projects. Thanks to the 2,000 EUROS that they are sending us, we will be able to open two new ASOLs. We are planning to have our first meetings with them at the beginning of April. This will allow at least another 20 families in the area to benefit from our project.

We thank you very much for your support!

First Reimbursement Meetings: Sagrado Corazón de Jesús and Unidos Para el Desarrollo

Monday afternoon, 11 January 2010, a month after the disbursement of the loans, we had our first reimbursement meetings with both groups, Sagrado Corazón de Jesús and Unidos Para el Desarrollo. Both meetings were very successful, we had only one person missing from each group and everyone (including the two missing - by giving the payment to a co-member) paid back the full installment.

We started off by reading out loud the bylaws they have come up with the previous meetings, regarding the consequences of not attending or coming late to a meeting and of not paying the installment. They have decided these consequences to be fines, i.e. they would pay a few Nuevos Soles into a money safe (to be used for all their savings and fines) we have provided them with, which forms a communal money pot - money to be spent on anything agreed upon mutually at the end of the cycle.

We asked the treasurer, secretary and president of each group to sit behind a table. Each participant was called up one by one to hand over the money to the treasurer, who would count it, sign the persons payment booklet, and who at the end separated the savings from the capital and put the former in the money safe, which is kept by the treasurer (the key stays with the president, to ensure one person cannot misuse the available funds). In addition to taking attendance, the secretary checked the money handed over to the treasurer and filled in a savings table to keep track of the amount going into the money safe. Normally, (s)he would also takes note of any decisions made at the meeting or of any situation which may be out of the ordinary, but there was nothing to note in either of these two meetings.

After having finished the more “formal” part of the meeting, we were able to spend some more time talking to the participants, asking them how they were doing and how things were developing regarding their economic activity.