Community Bank Inauguration!

Founder of FINCA, Maria Marta Padilla, swearing in all the members

O Tyler, Nathalia (Treasurer), Melissa (Vocal), Sharlyn (Secretary), Nelson (Fiscal), Elieth (Vocal), Me

Last Sunday marked the inauguration of the community bank I have been forming in Cristo Rey, Costa Rica. After 22 steps, meetings and countless phone calls and text, the community bank is complete, legalized and operating!

We have 48 members, a stock capital of 815.000 colones (or $1,706.73) and access to 1,100,000 colones in credit.

The inauguration even got a mention in FINCA-Costa Rica's NEWS.

ALSO! I've been working with a veteran community bank in my town, SACRIN, to build a multi-use center for the community. The building will house the library that Blake (the previous Peace Corps volunteer) started, computers, study areas and local events. It's huge! We are just completing a beautiful ceramic floor, and before I leave on April 22 we are hoping to inaugurate the multi-use center so the community knows it is available to them.

This multi-use center was made possible with a $5,000 grant that I solicited through the organization CR-USA.

The materials

View of the multi-use center from my garden! 

The multi-use center with roof

11 Photos of 2011

11 photos to mark 2011, and the events that I feel best represent my year as a Peace Corps volunteer in Costa Rica.

1) Forming a community bank in Cristo Rey. We finished the year with 50 members and we'll be inaugurating in January!

2) Dona Nathalia- my neighbor and closest friend. Many afternoons were spent embroidering, talking and sharing cups of tea.

3) Our network of 6 community banks comes together once a month to share challenges, solutions and celebrate birthdays! Maria Marta Padilla, Founder of FINCA- Costa Rica

4) Beto and the members of the Kid's Financial Education Program- learning the value of saving and planning.
 Posing with ice cream and my dog, Beto.

5) Making recycled pots and bowls with women from my English class. 

6) Celebrating the women's World Cup (& the visit of a dear friend)-  the San Cristobal Women's soccer team organized a day camp for girls. 

7) Organizing the First Annual Conference of Peace Corps Volunteers and Community Banks- a weekend of collaboration and planning for success for over 60 volunteers and community members from all over Costa Rica.

8) River rafting with the Central Valley Peace Corps Volunteers

9) In December I ran my first marathon in Panama City and placed 5th of International Women- with a $500 prize!!!

10) From working on computer skills, picking coffee, attending weddings and joking- much of the year was spent with my counterpart- Don Ananias. 

11) I dedicated a lot of my time to the microfinance organization- FINCA-Costa Rica: from planning FORO EC 2011 (an end of the year conference with all 115 community banks), to working on best practice manuals for the community banks, to organizing training's for my fellow Peace Corps volunteers and working with the Volunteer Committee to improve future training's and relations.

What to look forward to in 2012?

Inaugurating and legalizing the community bank in Cristo Rey, selecting new volunteers for the FINCA committee, finishing English and computer classes, working with Lies to become self-sufficient in selling her coffee bean jewelry to the US and other stores, providing a series of environmental workshops with the Kid's Financial Education program, running a 50 k in Arenal, climbing Mt. Chirripo and a trip to Nicaragua!

Happy New Year!!!

Estrellas del Norte

Thursday mornings are still spent moving about with the senior citizens.

Yesterday I accompanied them to San Isidro del Guarco (outside Cartago) for a gathering of over 200 senior citizens from the area. A few photos from the day:

Don Begnino

Excited to be here! (He's the only muchacho in the group!)

Las Estrellas del Norte

Doña Anna

Keeping the Mission in Mind

FINCA’s Mission: Promote integral development in communities, through the formation and strengthening of Community Credit Enterprises.

Nathalia, the treasurer, selling the first stocks

Two weeks ago we elected the board, credit committee and fiscal and purchased the first stocks. We sold 48 stocks, at 5000 colones each. Our social capital is 240,000 colones or around $480.

Yesterday was step 8  ½; granting the first loan. Please note, that once again we have a ½ step.

One side of me pushes to finish each step in time, to reach the end “goal” faster. But then I step back- realizing I am losing sight of the mission; which is to promote integral development in communities. This means not just the economic growth that will come from the access to loans, but also the education and financial literacy. Spending the time to make sure all elements of the process stay clear is crucial in working towards FINCA’s mission.

CCE- Cristo Rey

So we spent all of Saturday afternoon going over the process for soliciting a loan, the analysis of a loan, and how to calculate the repayment schedule.

The CCE charges a monthly interest rate of 2% (although the annual rate of 24% interest can sound high, it is important to take into account all the benefits of having the bank local, not paying for transportation, paperwork etc. and also earning dividends on their stocks. Many microfinance institutions charge a much higher annual interest rate).

Nathalia, our treasurer, is taking out the first loan for her artisan business. She wants to buy a new machine that cuts wood, and will make her work easier and faster. The machine costs around 100,000 colones or $200. Because this is the first loan, she has agreed to a short term loan of 8-months, in order to keep the money circulating.

Month	Initial balance	Interest	Principal	Ending Balance	Total Payment Due*
1	100,000	2,000	12,500	87,500	13,625
2	87,500	1,750	12,500	75,000	13,625
3	75,000	1,500	12,500	62,500	13,625
4	62,500	1,250	12,500	50,000	13,625
5	50,000	1,000	12,500	37,500	13,625
6	37,500	750	12,500	25,000	13,625
7	25,000	500	12,500	12,500	13,625
8	12,500	250	12,500	0	13,625

* To calculate the total payment due, we averaged the interest payments + the principal payment:                                                                          

It was essential that I took the time to really make sure they understood the whole loan process, as one of the most important aspects of microfinance is transparency. They need to understand what they are paying with each loan repayment and be able to complete the loan analysis, repayment schedule and forms with confidence.

Thus, we will finish step 8 next week, with payment of commission (3% to pay for administrative costs of the loan) and filling out receipts.

I’ll end with my golden moment: Cali, the president, asked if he could take home the loan repayment schedule we had written on large construction paper, "to study".

CCE-Cristo Rey voting on new members

It is so inspiring, so motivating that the members all have so much interest, and desire in the Community Credit Enterprise’s success. 

Motivation

Right now I am forming a Community Credit Enterprise in Cristo Rey, but also I work with a well-established CCE in San Cristobal Norte (my community).

San Cristobal Norte’s CCE (named SACRIN) is successful. Founded in 1996 with a social capital of 100,000 colones (around $200), they now have a social capital of 26,000,000 colones (around $52,000) and a credit portfolio of 115,000,000 colones (around $230,000). The capital is formed by means of members of the bank buying stocks in the CCE.  This is impressive, especially considering that the majority of the 83 members have not finished primary school and work principally in agriculture.

As I go through the formation process with the group in Cristo Rey, I ask myself, what is the recipe of motivation? Why has SACRIN succeeded while many other CCE’s are still struggling year after year?

Autonomy. Purpose. Mastery.

“Autonomy-  The urge to direct our own lives

Purpose- The yearning to do what we do in the service of something larger than ourselves

Mastery-  The desire to get better at something that matters” (-Daniel Pink, TEDtalk)

In Daniel Pink’s 2009 TEDtalk, he outlines the science behind motivation, arguing that for complex “thinking” tasks rewards are not the answer, but rather the intrinsic motivation to do something interesting is .

SACRIN is motivated, and not by money. The board of directors takes time away from their families, their work, their leisure time for the betterment of the CCE. They have been handed full control of the workings of the CCE, FINCA-Costa Rica was there 15 years ago to help in the formation, and they have a once a month meeting with 5 other CCE’s in the community, but the CCE is all theirs. They have complete responsibility of its success or failure.

2 members of the Cristo Rey group, taking responsibility and putting up the 22 steps 

SACRIN takes a great focus on the improvement on the community (members and non-members of the CCE). They offer various business courses, space for meetings, a library and a savings program for all youth in the community. The CCE is a part of something greater; it is not just access to loans, but a vehicle for change in the community.

And lastly, mastery- they have progressed greatly since the day of 20 members, and a suitcase for an office. Don Ananias, the president, directs the meetings with great skill, after years of experience and the continued desire to get better. He brings Costa Rican’s “Commercial Code” along with the CCE’s own regulations to every meeting, and can often be seen referencing them to help guide his decisions.

Right now, with Cristo Rey, I am focusing on autonomy. Giving them control of the formation of the CCE, allowing them to direct the meetings and take full responsibility. 

The Art of Listening

Or perhaps, more accurately, the art of asking questions.

Saturday we completed Step 7.5- the General Assembly, with the Cristo Rey group (where I am facilitating the 22 step process of forming a Community Credit Enterprise). Maria Marta Padilla, founder of FINCA-Costa Rica, came to clarify doubts/questions of the group, and check in on my work as a facilitator.  

Two new members making their arrows (these are taped onto the 22 step process, to mark where we are)

Last Tuesday I was in FINCA- Costa Rica’s offices, discussing the regulations Cristo Rey had written and the parts they hadn’t yet defined, the cost of affiliation and the activities they can solicit loans for. Cristo Rey decided to wait for Maria Marta's advice to define these sections. Maria Marta advised me that the group knows best, they have the answers- you just have to ask the correct questions.

Cristo Rey is quick to ask for FINCA-Costa Rica’s recommendations, but it is crucial that all their decisions ultimately come from within the group, because really the business is theirs, FINCA-Costa Rica merely acts as a guide in the formation. Once the 22-steps process is over, the group will be running all aspects of the business themselves, and need to believe in and understand their regulations if they are going to comply with them.

Returning to Saturday’s session: we ended up discussing the regulations in depth, trying to write concrete rules for the business to follow. Due to new members in attendence, we didn't end up getting to the "main course" (more on that later), but there were some good nuggets from the afternoon...

Lesson 1: If your question is met with crickets: focus the question down. That may seem obvious, but I listened to Maria Marta ask the same question FIVE times, getting more and more specific each time. Example: we were defining the types of activities that would be approved for loans, and the group was having a difficult time defining them. She started by asking “What activities would you solicit loans for?” Enter crickets. She kept getting more specific, “What types of productive activities would you solicit loans for?” Followed by, “What types of agricultural projects would you ask for loans for?” And the answers flowed out- “Planting Christmas trees, blackberries, orchids”. Bingo.

They needed to hear the question framed in a manner that they understood.

Sra. Maria Marta Padilla, asking the right questions

So the right questions had been asked, and the regulations finished- it was time to buy the first stocks!  Fortunately, three new members arrived, but, unfortunately they weren’t informed that today was the day to pay affiliation(3,000 colones or $6) /buy stocks (5,000 colones/stock or $10) and thus arrived without money. Without buying stocks, you cannot vote (one stock=one vote), which is why we had to postpone the two main tasks-buying stocks and electing the board of directors- for the next week.

Brining me to Lesson 2: Patience. It’s better to do something correctly, rather than to rush things. And what is one more week in the grand scheme of forming a business? So, everyone is coming next week with their wallets full, and (hopefully!) their homework completed of imagining who will make a good president, treasurer, secretary, fiscal, and member of the Credit Committee. 

English class Graduation potluck at my house last week. Next up: Intermediate Part II

The Power of Collaboration

I believe in the power of people coming together.

ECC- Cristo Rey, Charla Informativa (step 2)

Yesterday I was re-listening to Simon Sinek's TEDtalk, "How great leaders inspire action" on a run. Sinek's model for inspirational leaders is simple, and all begins with the question, "WHY?"

Why do we do what we do? Why do we wake up every morning? Why do we choose the path that we choose?

I thought about it as I ran up and down the hills of San Cristobal, why did I choose to be here? Why am I serving in the Peace Corps?

My why hit me as I thought about my most recent project, forming an Empresa de Credito Comunal in a neighboring community, Cristo Rey.

We had our first session on Saturday, step number 3 of the 22 step process (the microfinance model comes from FINCA-Costa Rica). For the motivation of the session the group was re-enacting the three little pigs, the moral of the story being strength but more specifically, strength in numbers. The three little pigs were able to build the strongest house when they all came together, in order to keep the wolf or lobo out (or at least out of the house, as he did end up in their bellies after jumping in their boiling soup on the fire).

ECC Cristo Rey- Charla Informativa

I believe that each community member in the room is going to achieve more when they come together. Alone the majority of them do not have the collateral to take out a loan at BancoNacional, or they really only need a small amount, or they can't afford to travel the 35 km to get to the bank, or they can't fill out the forms. But together they can slowly build their capital, and have the opportunity of financing, through something they created together.


I believe in the power of collaboration, and using connections to create good in the world.