To Nicaragua and the World of Microfinance

It’s been a few days full of mixed emotions. As my short backpacking trip came to an end after just 12 days, I was excited to arrive in Granada to settle down. Being here in Nicaragua, in the second poorest country, has left me feeling excited, empowered, and lucky to have had the life I’ve had.

I arrived last night after an 8 hour bus ride from San Jose, Costa Rica. San Jose is not the most beautiful city, nor is there much to do for the average backpacker. Most people avoid it like the plague. I stayed with a friend of a friend, an American who married a Tica (girl from Costa Rica). It was very cool meeting them and learning about their lives in Costa Rica. He’s been living there for about 2 years and they just got married earlier this year. They’re great people, and I had a lot of fun getting to know them and sharing experiences.

Getting off the bus in Granada, I was bombarded with persistent taxi drivers trying to get my business (this is a normal occurrence in Latin America). I get extremely tired of this, as they seem to never let up even after saying “no” several times. One taxi driver even told me that the city center was 8 km away. I smiled, walked across the street, and asked an older lady how to get to the city center. It was 7 blocks away. Sometimes people will do anything to try to make an easy buck (or Cordoba, in this case).

As far as money is concerned, I left myself without many options. I refused to exchange any money at the Costa Rica/Nicaragua border because I was not going to give away money to bad exchange rates. I arrived in Granada with 3,000 Costa Rican Colones (equivalent to about $6) and $14USD. I needed to call the Couchsurfer, Jorge, to figure out where to meet. But I couldn’t without any Nicaraguan Cordobas. I asked around and found a bank near the main plaza, but it only gave me bills in the amount of 500 Cordobas (about $20). I knew that no one would want to change that, so I decided to eat at a restaurant on the square to make sure to get change. I’m glad I did. For 70 Cordobas ($2.95), I had an awesome meal of a steak with jalapeno sauce, rice, beans, cole slaw, and plantain chips. The jalapeno sauce was absolutely delicious, I love plantains, and I have become known for eating so much rice. Welcome to Granada.

Cathedral in Granada's Central Park

Cathedral in Granada’s Central Park

Granada is the type of city that I was hoping it’d be. It’s in the range of 150,000 people, a good sized city, but not too large. It’s very walkable, easy to find places, and it’s a much safer than a large city. And the city is absolutely beautiful. Rebuilt colonial architecture line the roads throughout the city center. The Parque Central, the main square, is dotted with trees and surrounded by a cathedral, restaurants, and street vendors selling anything from fresh fruit to hammocks. The beauty, the atmosphere, the lifestyle. I saw similar cities in Cuenca (Ecuador) and Sucre (Bolivia), which happen to be what I would call the most desirable cities to live in South America. I loved the cities, and I love that Granada has a similar feel.

I have come to Granada to work for a microfinance non-profit organization called People Helping People Global (PHPG). I found the organization through an online search and saw they had a job opening for a Program Manager for their loan portfolio. Ever since reading a book called The Blue Sweater, I have had an interest in microfinance. The book is by a former investment banker who moved to Rwanda working for a microfinance organization. She explained how microfinance is about providing resources to people, helping them help themselves. Unlike charity, this form of giving is sustainable. By partnering with entrepreneurs, providing education, and holding them accountable, the income growth of the locals is sustainable, as well as the microfinance organization. This type of work has interested me for a few years, and I finally took the plunge to gain some experience.

Today, I met with Kyle in a coffee shop called Euro Café, right off the main square. Kyle was in a similar situation as me; he left his corporate job after four years to pursue a different type of work, socially responsible finance. He will be starting his MBA at William & Mary in August, and he also decided to try his hand in microfinance. He is an extremely sharp guy who has done great things improving the organization. His passion for this work is incredible. I feel lucky to be able to learn from him and pick his brain until he leaves on July 1st.

Kyle and I talked generally about the organization, how things work (spreadsheets!), short-term and long-term goals, and about my responsibilities. I am extremely excited and feel fortunate to have this opportunity. The organization is small and young, but that means there are many opportunities for improvement. As the Program Manager, I am given a good amount of responsibility. I am essentially the portfolio manager by monitoring the portfolio performance (delinquency rates, repayment rates), creating new loans along with Juan Carlos (the main Loan Officer), and collecting payments with the loan officers. I will also be in charge of directing the organization towards goals, improving the organization any way possible. I am extremely excited about this opportunity and the freedom I am given for projects. This was just talking with Kyle. Then came the collections.

Payments are collected every Friday and Monday in the town called Pantanol, located about 4 km outside of Granada. We arrived at Juan Carlos’s house in Pantanol to start the collections. Traveling extensively in South America, I thought I had seen poor. Seeing many parts of Bolivia, Peru, and Ecuador, I thought that was the poorest. Pantanol is poorer than I have ever seen before. I am honestly shocked and humbled. Most people are living on less than $2 per day. The life expectancy is low as diseases like dengue spread around the community in certain times of the year. This is one of the poorer parts of the second poorest country in the Western Hemisphere. These people need help, and that is what we’re here for.

I have never had a job where I can see my end customer so well, to see so clearly who we are here for and why we are here. In GE, my work would usually get swallowed up in the size of the company; whether I did something or not never had a significant impact on the business. It was difficult to see where my hours of work were going and what good, if any, it was doing. Today, I experienced something I had never felt before. In the morning, Kyle was showing me spreadsheets and standard operating procedures on the computer. In the afternoon, I saw exactly who the work affects. I saw their businesses and saw how they have used their loan money. I met the family who sells firewood and how their new axe allows them to gain more inventories. I met the gentlemen who make shoes. I saw the corner stores selling anything from pop to chips to cereal. And people smile. They joke around. They welcome us to their houses by pulling out chairs to let us rest while we receive their payment and fill out the paperwork. Children looked on with great curiosity, even sending us off with an attempt at English with a “Goobye”. If this doesn’t empower someone, I sure as heck don’t know what would.

My heart is heavy from what I saw today. But I am inspired. Nothing comes easy for those in this community. Deprived of education and opportunities, there are not many options for improving their lives. That’s what we’re hoping to do. Cash strapped entrepreneurs have no chance to grow. With a zero percent interest loan and a bit of business education, improved income and quality of life is possible. As the popular quote says, “Give a man a fish and he’ll eat for a day. Teach a man to fish and he’ll eat for a lifetime.” Our goal is to teach these men and women to earn for life.

Convento San Francisco in Granada

Convento San Francisco in Granada

Street near the Central Park

Street near the Central Park

About Trent

I started Frugal Purpose to share my love of personal finance to assist your pursuit of a more fulfilling life. I am a financial analyst by trade, traveler at heart, and want to share with you the beauty of this world.

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