Out of Cusco: Day in the life of a loan officer
Carrie Nguyen | KF17 | Peru
On Friday, I accompanied a loan officer to visit one of her 19 village banks just outside of Cusco, Peru, in the Andean highlands. On this occasion, we were providing the bank’s eighth loan disbursement since its formation in 2008. Despite a long-standing relationship with Asociación Arariwa, the group still had many organizational issues to iron out. This became evident as our routine meeting, which should have taken one hour, stretched into an all-morning affair.
By the end of the day, I had a much greater appreciation for the hectic schedule that loan officers face, and the numerous risks and obstacles involved in performing their jobs.
5:30 a.m. My alarm goes off. Is the sun even out yet?
6:00 a.m. I meet Karen, the loan officer, at a plaza in downtown Cusco. Together, we take a taxi to the paradero in Santiago district, where five-seat cars await passengers to Anta. We are the first to arrive. Several minutes later, two more passengers join and we set off through the lush green Sacred Valley on winding roads that hug the mountainside.
6:50 a.m. We arrive in Anta with time to spare, and walk over to the Arariwa meeting room. The village bank has 14 members and we expect to see them all this morning. Since most of them engage in agricultural activities, we set an early meeting time so they could attend to their business at the Friday feria, a huge outdoor market where everything from corn to cattle are exchanged.
Construction taking place just outside Arariwa’s meeting room.
Meeting the borrowers
7:00 a.m. Time to get started! Oh wait… where are the borrowers?
7:40 a.m. At last, one village bank member pops her head in. “Can I go to the medical clinic to pick up my pills then come back?” she asks.
7:50 a.m. Four borrowers arrive, including the group’s secretary, who begins to update the village bank’s log book. Karen decides that she needs to go knock on some doors in order to find out where the remaining members are. One of the women helps her round up members from the nearby market.
8:13 a.m. Finally, all but two of the 14 bank members are gathered in the room, and we can start. Karen begins by asking everyone to come on time, noting that future meetings would take only 30 minutes if everyone were punctual. Like a teacher, she has to strike the right balance between firmness and cordiality in order to elicit the behavior she seeks.
The village bank president then gives a speech, and the group collectively agrees to norms such as a 1 sol ($0.40) penalty for arriving more than 15 minutes late, and a 5 sol ($1.90) penalty for missing the meeting. The four bank officers agree to pay double penalties.
8:25 a.m. Karen writes the payment schedule on the board. Members are required to attend monthly repayment meetings during the loan’s 6-month term. A woman asks why the dates aren’t exact; shouldn’t the payment dates be the 17th of every month? After attending five loan disbursements last week, I have learned that repayment dates are a sensitive issue, and questions about irregularity in dates nearly always arise. The sums may seem small to us, but the quantity and timing of payments matters enormously to micro-borrowers.
8:37 a.m. One by one, each group member approaches the table to sign for his or her loan amount. The loans range in size from 150 to 2,000 soles ($50 to $750). In total, the group has requested 10,950 soles – over $4,000 in cash which Karen had to carry all the way from Cusco to Anta in a plastic bag inside her purse. I am hesitant to carry even $100 around in the United States. If I weren’t there, Karen would have had to make the trip alone – but this is the risk that loan officers face everyday.
9:20 a.m. Mission complete. Huzzah!
Off the market
9:30 a.m. We head over to the Anta market for a welcome break: hot chocolate and pan con queso (bread with cheese), served up by one of Arariwa’s borrowers.
10:00 a.m. Karen takes me to the feria where I gawk at cows, sheep, and chickens meandering across the field. We also find one of the missing village bank members tending to her barbecue stand. She is happy that we are able to disburse her loan even though she could not attend the meeting.
10:45 a.m. We hop in a van and 45 minutes later, arrive back in Cusco. My day of traveling is over, but Karen still has a long day ahead of her: a credit meeting with clients in Cusco, then another trip back to Anta to collect loan repayments from a different village bank.
In total, it took 5.5 hours including travel time to disburse S/.10.950 to 13 members of a village bank. I may not have to come back, but Karen will need to make this trip six more times over the course of the loan in order to collect repayments. For her and the borrowers’ sake, I sure hope this group can get their act together!
Carrie Nguyen (KF17) is serving as a Kiva Fellow with Asociación Arariwa in Cusco, Peru. Support microentrepreneurs in the southern Andean provinces of Peru by joining the Arariwa lending team. Or lend to a Peruvian borrower right now.