The World of Filters
Living in the developed world, we become accustomed to convenient filters that give us what we want, sidestepping some unpleasant truths. Meat is a delicious hamburger with fixings in a toasty bun, for example, and not the carcass at the neighborhood carnicería with flies swarming around it. Clean, potable water is just a slight turn of the wrist away while disposing of waste requires tossing garbage bags on the street or pushing down ever so firmly on the toilet lever. While Nicaragua lacks many of these fundamental filters that make life easier for both the microfinance institutions (MFIs) here as well as the small business owners, Kiva is filling a void. Serving as a vital filter for those lenders who are eager to lend to capital-hungry small business owners but do not have the access or resources to do so, Kiva is continually striving to support its partnership relationships in developing countries.
More specifically, the Kiva Fellows program strengthens the filter between Kiva, its lenders and the MFIs on the ground, which are often the only channel of credit for many entrepreneurs. Aside from the initial vetting process, Kiva is aiding MFIs all over the world in scaling their operations through increased funding, efficiency and transparency, with the ultimate goal of helping the MFI achieve a self-sustainable model with an expanding portfolio of credit-worthy loans. By increasing transparency in the lending process, Kiva provides lenders with specifics about their loans, so lenders are assured that their money does not go into the same black hole that their waste does.
While working at ADIM (Asociación Alternativa Para el Desarrollo Integral de las Mujeres, www.adim.org.ni ) in Managua, my colleagues and I sit next to the side office where scores of clients come in to either make repayments on outstanding loans or interview and apply for new ones. As these borrowers stream in, ADIM’s staff gains a detailed understanding of not only the entrepreneurs’ businesses but a more informed picture of the people behind the businesses. With such routine exposure to their clients and the ability to maintain a frequent dialogue regarding the business venture, ADIM enjoys filter-less interaction throughout each phase of the lending process, from initial interview to final repayment. As many banks in the developed world continue to grapple with the painful consequences of a prolonged credit binge, more face-to-face interaction and fewer filters with clients seems like good business practice.
Dan Tulchin (KF12) is attempting to stay dry during Nicaragua’s relentless rainy season as he serves as a roaming Kiva Fellow. Dan will be shuttling between Managua and León for the next 7 weeks of his fellowship.