Three years ago Juana, a resident of Teotitlán del Valle, Oaxaca, was earning virtually nothing selling the odd bottle of soda pop or package of gum out of her family's narrow, half-empty storefront. Today, with the assistance of small, interest-free loans facilitated through $50 USD donations from tourists visiting Oaxaca, she earns a decent living as the proprietor of a handicrafts store filled to the brim with colorful hand-woven, 100% wool rugs, tapestries and handbags.
Last year Cristina was a pieceworker earning five to ten pesos for each plain cotton apron she sewed from a roll of material supplied by her patron. Now she's a businesswoman selling fully embroidered aprons to market stall owners.
Fundación En Vía ("En Vía") is a non-profit micro-finance organization responsible for several similar success stories since 2009. En Vía relies exclusively on donations of time, expertise and modest sums of money from tourists visiting Oaxaca, and to a limited extent on the generosity of more fortunate Mexicans. It's based on two premises:
Fundación En Vía: How It Works
Fundación En Vía 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 Vía 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.
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 Vía 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 Vía 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 Vía 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 Teotitlán del Valle (it has recently expanded into Díaz 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 Teotitlán del Valle with Fundación En Vía
After a 40 minute orientation session at the Instituto in downtown Oaxaca, a group of donors, including two Mexican women from Morelia, Michoacán, and three En Vía workers, hop into a touring van and head to Teotitlán 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 pericón, 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.
Lina 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 Lina, 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. She 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 Juana Began, Before Having Her Own Storefront
Before Juana 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 bought enough wool and woven enough rugs to switch from selling pop and gum to begin filling her own rug store. Juana 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. Juana is one of the graduates of the six week business course offered by En Vía.
Cristina The Apron Maker
We then learn how Cristina 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. Cristina 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 she 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 Vía; 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 Fundación En Vía
The assistance which En Vía 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 Fundación En Vía 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 Vía 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?
Alvin Starkman has a Masters in Social Anthropology from York University and a law degree from Osgoode Hall Law School. Alvin ceased practicing law in 2004, when he and his wife Arlene began living permanently in Oaxaca. Since that time Alvin has written over 200 articles about life and cultural traditions in Oaxaca. Alvin assists his wife in the operation of Casa Machaya Oaxaca Bed & Breakfast and arranges culinary tours of with Chef Pilar Cabrera (http://www.oaxacaculinarytours.com). Alvin is a paid contributing writer for Mexico Today, a program for Marca País - Imagen de México. Alvin offers touring advice of the sights in and around the central valleys of Oaxaca.