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Borrower Verification in Bolivia: One Kiva Fellow’s First Days in the Field

October 16, 2012

By Peter Soley, KF19, Bolivia

Lofty La Paz, Bolivia

The Tilted Life in Lofty La Paz

Landing at the La Paz International Airport in El Alto leaves one breathless; the thin air is immediately manifest. At nearly 13,000 feet (4000 m), La Paz is the highest capital city in the world. The lower-altitude Sucre remains the official capital, but La Paz is the de facto power center in the country housing both the executive and legislative branches of government.

La Paz is blessed with a magnificent setting: the austere altiplano perched far above the dense construction of central La Paz, the surrounding snow-studded Andean peaks of the Cordillera Real that tower to the east, the crowning and iconic Mount Illimani (meaning “golden eagle” in the indigenous Aymara language) which soars to over 22,000 feet (6465 m).

In La Paz, nothing is level. Everything either streams downhill or slogs uphill. There is no horizontal here and consequently nothing stands still. Everything is a whirl of motion, upwards and downwards.

The tipsy-topsy world of La Paz

The tipsy-topsy world of La Paz

Trickle-Down Economics

So flows the relative prosperity of the La Pazians, or paceños as they are known here. Affluence increases as altitude decreases, dropping from the ever-expanding shantytowns of El Alto on the high altiplano rim and down through the dangling Aymara neighborhoods perched precariously on the steep slopes.

Below is El Centro also called la hoyada (the hole), the crowded heart of the city and home to the national government and the scant colonial remnants that survived the decades of rapid change resulting from mass migration from the countryside.

The city descends further to the upscale neighborhoods of Miraflores and Sopocachi, home of expensive apartments, a bounty of chic bars, Japanese and French restaurants, and jazz cafes.

Finally, La Paz comes to rest in the newly-minted Zona Sur neighborhood where most of the expats, diplomats and rich paceños live in gated communities. This is where the wealth of La Paz finally settles.

Luminescent La Paz at night

Luminescent La Paz at night

A Million Luminous Lives: Todos Somos Iguales (We Are All Equal)

Standing in the bowl of La Paz at the city center at sunset, lights shine from the buildings and homes of residents and sprawl in every direction. At night the city glimmers with all the energy of a modern metropolis, illuminating with equal intensity above and below.

This is a city of rich and poor, rural and urban, from many different indigenous backgrounds, and from all regions of Bolivia. Heterogeneous La Paz is home to Amerindians, Mestizos, Europeans, Asians and Africans. The Bolivian Constitution officially recognizes 37 languages. Bolivia, officially known as the Plurinational State of Bolivia, is indeed a multiethnic haven.

And to affirm this great diversity, La Paz recently issued an anti-discrimination ordinance and requires businesses to prominently display the following: Todos somos iguales ante la ley (“We are all equal before the law”).

"We Are All Equal But - We Don't Live Equally"

“We Are All Equal But – We Don’t Live Equally”

But, economically speaking, this is not so. Some paceños must work much harder than others just to scrape by. One of the poorest countries in South America, Bolivia remains a classic case of economic disparity. The most recent poverty data for Bolivia show that:

  • 60% live in poverty
  • 38% live in extreme poverty
  • 80% have no access to electricity
  • 86% have no access to running water
  • 50% have no sewage system connections

Recent emphasis on poverty reduction by President Evo Morales is likely to improve the situation for millions here. Yet it will take many years through a dramatic transformation of Bolivian society and greater economic equality.

La Paz is where I begin my life in the field as a Kiva Fellow. It is among these people that I will go about my daily business, put names to faces and to lives, and learn and share as much as I can in this strikingly beautiful and imbalanced world.

Kiva and Emprender: Friends in the field

Kiva and Emprender: Friends in the field

My Kiva Mission Número Uno: Borrower Verification

One of my main objectives as a Kiva Fellow is to complete the borrower verification process for two of Kiva’s microfinance partners in Bolivia. This process essentially validates that the information about borrowers and loans on the Kiva website is accurate.

With a random sample of 10 loans for each microfinance partner, I go on field visits to the loan offices and the Kiva borrowers’ homes and businesses, review loan documentation, discuss issues and status with loan officers, and conduct interviews with the borrowers themselves.

This is an important exercise for Kiva. These borrower verification reports are crucial in helping everyone at Kiva understand what is going on at ground level with the microfinance partners. It’s a singular opportunity to assess the partner’s understanding and execution of Kiva’s policies, helps find good faith errors in data or processes, and can determine areas of improvement to build a stronger relationship between Kiva and the partner.

The busy loan officer: A Kiva Fellow's best friend

The busy loan officer: A Kiva Fellow’s best friend

El asesor es mi copiloto: Learning to Love the Loan Officers

The loan officers I’ve worked with are remarkably companionable. Part sales people, part coaches, part financial advisers, part collection officers, part advocates – they wear different hats. In La Paz and El Alto, they spend a lot of time pounding the pavement, visiting clients to see how things are going, catching up with former loan recipients, and prospecting for new loans.

They write the borrower profiles on the Kiva website that we all read as Kiva lenders. They are the eyes and ears of the partner organization, and the ones who work most closely with clients. They work to keep the Kiva loan repayment rate at well over 99% for Emprender.

And they are my trusty companions who accompany me on verification visits to Kiva borrowers.

Kiva's partner Emprender in La Paz, Bolivia

Kiva’s partner Emprender in La Paz, Bolivia

First Stop: The Microfinance Institution Loan Office

After breakfast at my small hotel in La Paz, I begin the energetic climb upwards to the Emprender office in the Villa Nuevo Potosí neighborhood. I’m glad to escape the morning chaos of central La Paz, which is teeming with people, traffic congestion, and bustling street commerce that makes the downtown sidewalks difficult to navigate.

Up here in the neighborhoods that rise steeply above the city center I find cleaner air, quiet streets, quaint homes, and pleasant corner kiosks. Locals greet me from open windows. The views of the surrounding mountains are marvelous.

I meet with Simón, the loan officer who works with the client I will be visiting. I wait patiently as he attends to an early rush of clients and examine the loan paperwork: loan disbursement, repayment schedule, the actual payments, client waiver, etc.

Pages from the client folder with all the loan documentation

Pages from the client folder with all the loan documentation

Everything is in order. I take time to review the other documents Emprender collects to approve the loan: financial evaluation, past loan review, collateral, personal references, bank statements, and so on.

The client folder is exhaustively detailed and meticulously maintained. I am learning a great deal about finance in this part of the world: utility costs, housing prices, small-business accounting records, bank interest rates, even the value of household personal items such as televisions, refrigerators and furniture.

After a quick desayuno, a daily ritual in which the entire office takes tea/coffee and bread in the break room, we set out on foot to visit the client. This is often the fastest way around the neighborhood since the meandering streets are normally jammed with traffic.

Road Race: Pedestrians usually win in congested La Paz

Road Race: Pedestrians usually win in congested La Paz

I enjoy this “commute” time with the loan officers, we talk about their daily work and their families and about my life in the United States and my work here in Bolivia. We get to know each other, and I appreciate their approachability and willingness to spend time with me despite their often full schedules.

Celestina, a Kiva borrower, in her bakery

Celestina, a Kiva borrower, in her bakery

Finally, I Meet the Kiva Borrower…

Señora Celestina, the Kiva borrower, welcomes Simón and me in her home where she runs an adjacent bakery. There are racks of freshly rolled dough ready for the oven, baskets of tasty cookies and meringues ready for packaging, and piles of eggs and bags of sugar which she purchased with the help of the Kiva loan. I am happy to discuss her business and her life in such a warm and aromatic setting!

Melt-in-your-mouth meringues, one of Celestina's specialties

Melt-in-your-mouth meringues, one of Celestina’s specialties

With the help of the loan officer, I explain the purpose of our visit and some more about Kiva. As we go through the verification process, Celestina readily answers all my questions and brings out the loan paperwork she has. I check that the dates and figures match and that she understands the Kiva client waiver which authorizes her information to be posted on the Kiva website. I document everything since it will be reviewed back at Kiva headquarters.

After the formal verification is complete, I chat casually with the borrower. This is usually my favorite part of the visit, the borrowers open up a bit more, we can joke about things, and I learn more about their lives and families and ambitions. On this trip, Celestina proves to be especially talkative and shares generously.

Eggs, eggs, eggs... Celestina keeps the hens busy

Eggs, eggs, eggs… Celestina keeps the hens busy

She tells me more about the success of her baking business: how she produces fairly large quantities and types of cookies for special fairs and holidays in the La Paz area. More recently she is sending these baked goods further afield and even into Peru (Cuzco and Juliaca) where festival demand is great for these delicacies.

On this particular day, Celestina is working hard for the upcoming Todos Santos (All Saints Day) celebrations in early November. Given the thousands of eggs stacked in her bakery, I know the coming weeks will keep her busy. She willingly offers me plentiful samples of her cookies, some right out of the oven, all of which are delicious and beautifully prepared.

Cookies ready for the oven

Cookies ready for the oven

Celestina shows me her bakery, the ovens, and the piles of flour, sugar and eggs that they purchased with the loan funds. She introduces me to her ebullient husband, welcoming son and amused granddaughter. They all help her with her baking, especially during the crunch times when large festivals are fast approaching.

She is a cheerful and warm person and I greatly enjoy my time with her, but she is busy and the loan officer has other tasks ahead of him today. As we depart, Celestina speaks highly of Emprender and especially Simón, her loan officer.

We share some final laughs when she tells me (jokingly) that they all will come to the United States to start a baking company with me, naming it “Bolivian Baked Goods Company of America.” I assure them that their splendid cookies would be a hit and they thank me for my vote of confidence with handshakes, hugs and smiles.

Celestina's security detail: keeping watch by the kitchen door

Celestina’s security detail: keeping watch by the kitchen door

I feel wistful leaving Celestina and the elevated Villa Nuevo Potosí neighborhood, yet I am beaming inside and my feet barely touch the pavement as I descend towards downtown La Paz. It is a special privilege for me to be a part of all this, passing through doorways of private homes as welcoming locals so graciously let me into their lives for even a few moments.

Happily, I have many more clients to visit in my remaining weeks and months as a Kiva Fellow. I eagerly await my next encounters with Kiva faces and hear the extraordinary stories that shine all around me from on high in big Bolivia.

Peter Soley is a Kiva Fellow (Class 19) serving in Bolivia (La Paz, Cochabamba, Santa Cruz) with Emprender. Become a member of Emprender’s lending team, lend to one of their borrowers today, or apply to be a Fellow!