Edith Guerrero Cruz

Thank you for your loan. It has been disbursed to Edith Guerrero Cruz by Asociación Arariwa in Peru. We are excited to watch this business grow. Over the 3 months of this loan, Asociación Arariwa will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

On Thursday afternoon, I visited with Edith at the first repayment meeting of her village bank, the Sumac Soncco group. Edith was there with her young son, an active, mischievous little boy who ran around playing with the other babies and children at the meeting. At one point, a few of the other kids put him on one of the loan officers’ motorcycles and he pretended to ride it.

Edith told me that she used her Kiva loan of 1000 soles to buy more ingredients to make empanadas, just as she had planned. She bought flour, lard, sugar and baking soda. Sales are down a bit at the moment, she says; she attributes this to Mother’s Day. Since most Cusqueños get paid at the end of the month and many spent large fractions of their income for the holiday, they are now holding out until the end of May to get paid again, so they are spending less on things like food.

Edith has been a client of Asociacion Arariwa for the past five years. “It’s a help,” she says. Over the years, loans have allowed her to buy her ingredients in bulk instead of by the kilo, saving her a significant amount of money. She has used the money accumulated in her Arariwa savings account to make major purchases for her son. Edith has never taken out a loan from another institution, since other institutions usually ask for more formal collateral, like a property title.

Note: Because of the delay between when repayments are made to Asociacion Arariwa and when they are reported and sent to Kiva, Edith appears to have repaid 0% of her loan, when in reality she has repaid about 25%. Repayments may take up to six weeks to be reported and deposited into lenders’ accounts—please be patient!

Thank you for supporting entrepreneurs in Peru. As you may know, all Kiva loans are actually administered by local field partners. For the past couple of months, I have been working as a Kiva Fellow with Asociación Arariwa, Kiva’s newest field partner in Peru.

Arariwa (which means “protector of crops” in Quechua, Peru’s main indigenous language) became a Kiva partner in August 2008, but did not begin posting a significant volume of its clients to the Kiva Web site until early 2009. Arariwa’s executive director, loan officers, and Kiva coordinator are palpably excited about what they call “Project Kiva.” They are working hard to visit village banks in isolated, rural areas of the Cusco region so rural clients can tell their stories and fund their loans through Kiva.

Raquel Villafuerte, Arariwa’s Kiva coordinator, is passionate about traveling and visiting the communities of the countryside around Cusco. In this sense, she is perfect for her job. Others might resent the long, often uncomfortable hours of travel on dirt roads, and occasional overnight stays in distant communities far from family and friends that come with the job, but Raquel enjoys the work and always has a smile for her clients and her co-workers. Unfortunately, Raquel and an Arariwa loan officer were injured in a motorcycle accident last month while returning from a visit to a Kiva group. Her scrapes and bruises didn’t dampen her enthusiasm for her work, although she has avoided motorcycles since then.

Arariwa’s loan officers serve different communities in the Cusco area. Some loan officers work within the city of Cusco and hold their group meetings at the Arariwa office. Others work up to two hours outside the city and hold group meetings in clients’ houses or businesses. These loan officers still report to the central office in Cusco each day. Other loan officers work even further from the city (three to nine hours away), live in the communities they serve, and only report to the central office every few weeks. One of these loan officers is Marco, who lives and works in the community of Lares. To illustrate how small Lares is, here’s a conversation I had with Marco about a week before I went to visit one of his village banks, Tikarisun de Ccachin:

Me: I should get your cell phone number so that we can coordinate when and where to meet up.

Marco: There’s actually no cell service there, so I’ll give you the phone number for Lares instead.

Me: Oh, Arariwa has an office in Lares?

Marco: No, it’s the phone number for Lares. The town has one phone. Just leave a message with whoever answers, and they’ll come find me and give me the message.

The Tikarisun Village Bank is located in Ccachin, a rural community high up in the clouds in the hills outside Lares. Like Lares, Ccachin has just one phone, but it is a much smaller community and it has even less contact with the outside world. Ccachin is just thirty or forty minutes from Lares by car, but it is much more isolated due to its small size, its remote location in the hills, and the lack of public transportation connecting it with any other nearby towns.

For me, getting from Cusco to Ccachin meant a nearly four-hour ride in the company pickup truck down bumpy dirt roads. The trip was tiring, even though I had the luxury of traveling in a private vehicle. It was easy to see why villagers in Ccachin don’t travel to Cusco to get loans.

My visit to Ccachin really opened my eyes to the importance of extending microfinance to rural areas. When we talk about people living in developing countries, we don’t always distinguish between urbanites and rural farmers. In Peru, however, that distinction is very important. Peruvians in rural areas are much more likely to be indigenous Quechua-speakers, to be living below the national poverty line, and to have little or no formal education. They typically cook with wood fires instead of gas stoves, live in adobe houses instead of concrete or stucco homes, and have more children to support than do city dwellers. Loans are readily available to a shop owner in the city of Cusco, but not to a small farmer in the countryside.

The credit and education that Arariwa offers go a long way in rural areas like Ccachin, because micro-loans are usually the only source of external support available to small businesses like Señora Ernestina’s grocery store, Señora Victoria’s pig farm, or Señora Hipolita’s chicheria (Chicha is a traditional Andean corn beer). Marco, Tikarisun’s loan officer, is already the godfather of three of his clients’ children, an indication of the respect and gratitude the community has for him. Another Arariwa loan officer, Tula, who works in the remote jungle town of Pilcopata, says that her clients often encourage her to run for mayor of Pilcopata.

Arariwa’s staff is working hard to provide journal updates for all of its Kiva clients. Because so many of Arariwa’s clients live quite far from the central office in Cusco, reaching each and every Kiva client for a follow-up interview is simply not possible. Nonetheless, 27% of Arariwa’s loans have journal entries, compared with just 12% for all Kiva field partners.

I hope you have found this journal entry to be interesting and informative, and I’m happy to answer any comments or questions you may have. I have been lucky enough to see the effect that Kiva loans are having on the ground here in the Cusco region. Arariwa’s Kiva clients, the staff and I are extremely grateful for your support. I hope you continue to lend to Peruvian entrepreneurs through Asociación Arariwa!

Read the Tikarisun Village Bank’s Kiva profile and read about my visit with Evarista, one of the group members:

http://www.kiva.org/app.php?action=about&id=95881&page=businesses&_te=mj

View all Asociación Arariwa loans that are currently being funded:

http://www.kiva.org/app.php?page=businesses&partner_id=119&status=fundraising&sortBy=New+to+Old&_te=mj

Best regards,

Cynthia McMurry

Kiva Fellow

Apologies: photo accidentally left out from last email.