ArribaYa,
Update August 2009
This page
provides a quick overview on ArribaYa and its
performance until now. Moreover a glance into its future is provided.
Below the
main figures of ArribaYa and how it has operated
until now are represented. A division has been made between two different types
of micro finance. The initial idea was to hand out the loans and receive weekly
payments for a year. This means that 52 repayments would take place. The
interest rate was 50%.
The figures
of this type of loans are:
|
Total number of socias |
105 |
|
Total number of loans |
116 |
|
Total amount of loans |
31,460.00 |
|
Total amount to be reimbursed |
47,140.00 |
|
Total amount reimbursed |
35,512.20 |
|
Total amount remaining |
11,988.80 |
Note: All these amounts are in Peruvian Soles.
Currently $1 = S/.3
Due to some misfortune,
which is explained in this report, changes were implemented and a new type of loans were granted. These loans required a monthly
reimbursement with completion in 4 months after the initial granting of the
loan. These socias received an interest loan of
merely 12% due to the fact that the costs attached to these loans were much lower
as well.
The figures
of this type of loans are:
|
Total number of socias |
20 |
|
Total number of loans |
30 |
|
Total amount of loans |
9,100.00 |
|
Total amount to be reimbursed |
10,434.00 |
|
Total amount reimbursed |
9,185.00 |
|
Total amount remaining |
1,249.00 |
Note: All these amounts are in Peruvian Soles.
Currently $1 = S/.3
It can be
concluded that this ultimate type of loan with a monthly reimbursement worked
out better than the initial one with weekly reimbursements. However, the
results are not fully satisfying. In fact, most of the Dutch funding has been
used for this and around 15% of the initial funding from The Netherlands still
remains. What was it used for This
is not acceptable and is due to the malfunctioning of the micro finance
project. Therefore some changes will be implemented in the very near future.
We will
continue with ArribaYa in the following three ways:
1.
Micro Finance - we will do the selection and training
of the socias. However, the financial part will be
covered by a different micro finance institution with which we will set up a
collaboration. Names
2.
Education - we will educate women and prepare them for
a different job outside of our organization. We will get them qualified in
order for them to have more chance on the labour
market.
3.
ArribaYa has plans,
and is proceeding in them, to advance in business. Different projects are on
the line. In these projects the socias will play a
key role. They will enjoy a lot of responsibility and will be co-owners of the
project. Two projects are expected to advance; hand-sewn, ecological jeans and
potato seeds. More on them will follow in a next report as this is where most
of the remaining funds will be dedicated to.
What will
follow is a brief history of the ArribaYa micro
economic community development and poverty eradication project - from its first
days of operation, (early 2007) until the present. Including accounts of what
we have done, what we are doing now and what we intend to do in the future.
Detailed explanations are provided on the different matters.
The history
of ArribaYa
The first
many months were spent with a success rate of around 95%. We were forming
groups of five women who trained together and were responsible for one another
(both in terms of seeing to one another's success in their respective micro
enterprises as well as to their making their weekly payments on time and in
full).
Then at the
end of the year I had to go to
By this time
last year things were working well enough again to hold a celebration for all
the women who had succeeded in launching a business which continued to succeed
and sustain their families. We called it
an anniversary. The press came and a TV program was broadcast in
Late in
Period of
evaluation and reconsidering
What we now
possess which will ultimately assure our success in the ArribaYa
project are the valuable lessons learned from the errors I just listed, our
very talented staff and the fact that I do not give up. As in our project to
educate street kids (and others before) now successful, with each early failure
we put the project back on the drawing
board, until sooner or later we got it right.
For
instance, since we concluded that we have not succeeded in forming communities
of urban slum women which are bound together strongly enough to assure the
performance of each member in every community; we went in search of
alternatives: existing impoverished communities which both possess these civic
qualities and might be interested in receiving our helping to raise its members
out of poverty. In our research we discovered that some religious communities
possess a strong sense of sorority and peer respect, perhaps enough we hoped to
perform as our earlier communities should have done.
ArribaYa therefore, in September/October 2008, with the
collaboration of Priests and Pastors began preparing groups of poor women from
their congregations. After a period of civic instruction and practice as well
as preparation in the skills of their chosen micro enterprises we determined
that these women qualified to receive micro loans.
Note: We found that we were much more
conservative in approving new applicants than we had been in our first 18
months due in part to the falling compliance rate after the first year, but
mostly because the money invested prior to October 2008 had come personally
from the founder of ArribaYa, and everything after
October 2008 was given by donors from the Netherlands.
The good
news from this variation on economically developing barrios full of poor urban
women, is that those already related to one another within a single purpose
structure, are performing at a rate of nearly 100% success in their micro
businesses (even at this time of universal economic recession), and ArribaYa therefore has been recovering the funds invested
in them. Based on this we have granted up to three loans each to the members of
these communities
The
disappointment in working only with existing single purpose community
structures has been that there are only a few such social structures in each
urban slum. In consequence we have been limited in the number of loans we could
make and have not been putting out enough money to justify the cost of the
Arriba Ya permanent staff, transport, communication and administration. In
short Arriba Ya has been operating at a loss.
This is not
to say ArribaYa has been altogether unsuccessful. We
have succeeded in launching practically all the women we have thus far prepared
and funded into their own varyingly successful micro enterprises - a few have
gone on to build small businesses with up to eight and ten employees or
associates. We have prepared our women so well that 43 of them, rather than
become self employed, qualify for jobs which are paying three times the minimum
wage. What we have so far failed to accomplish is to get ArribaYa
to be self sustaining.
Our assets
-We have
enough capital to continue funding the micro enterprises of small single
purpose communities such as we have been doing since October 2008, but not
enough to either grow or even sustain our present staff.
- We have
succeeded in helping nearly 200 families raise their economic status, many in
sustained business or jobs.
- We are
fairly well known in our own region and to a lesser extent in
- Our most
prized asset however is our talented, dedicated and experienced team who
successfully recruit, prepare for work and business our mothers. Improving
their lives, discipline, skills and wellbeing (and thereby indirectly that of
their children), helping women who are still raising themselves out of poverty
through community economic development.
So, what
have we learned so far?
- We know
our staff are effective in inspiring poor women to
improve their discipline, skills and performance, and to grasp the fundamentals
of operating a micro enterprise at a profit.
- We know
that poor women, especially mothers, even though living in the desperate
circumstances of an urban slum, can - with a little help - rise to become
productive, industrious and economically self sufficient.
- We accept
that, despite early indications to the contrary, we either are unable or else
the investment required it too high warrant our pursuit of a project which
depends on creating in urban slum conditions communities of women sharing bonds
similar to those shared by women who have lived together all their lives in
small rural villages.
- We have
come to believe - contrary to the majority of microfinance NGOs which have
opined on the subject - that the level of economic poverty in which a person
lives is not a limiting factor to their ability to rise out of poverty, so long
as they are offered an opportunity. We believe that what limits our ability to
help the women we have worked with so far is not their economic but to
ignorance, emotional disorders, laziness, moral poverty. We truly believe that
mothers whose only impediment is the hopelessness of life in abject poverty
can, with only a little help, rise exponentially and disproportionately faster
up the economic ladder than people who started from a point higher up than
they.
- We have
observed that people who are succeeding at sustaining themselves and their
families at the bottom of the economic pyramid are almost impervious to the
vicissitudes of the broader economy. They are not hurt by a recession. Whose
enterprise might therefore prove to be a better all weather investment than
something at the macro level – provided a vehicle can be designed for
conveniently injecting capital into this virgin sector of the economy..
- We have
come to believe that investing the skills, care and time required to raise a poor woman’s personal capital to a level which
qualifies her to receive financing, investment or a decent job is essentially a
social function, and should not be meted out on the basis of investing to chase
a profit. And by this token the people who fulfill this role in community
development have motives and a skill set which are particular to this function,
which would not necessarily be suited to managing, administering or executing
the post financial investment relationship with a woman they had so prepared.
Likewise the motivation and skills of the person managing a poor woman’s loan
portfolio are likely to be different to those required of the person who
prepared the woman to qualify for the loan. So too the relationships between
these two types and the poor woman will inevitably be different. One is her
teacher, disciplinarian, supporter, while the other approves her loan, manages
her post investment compliance; may even confront her one day in the role of
debt collector.
- We
consider that the capital base for an NGO which would undertake to prepare
women for micro economic development in an urban slum environment and to fund
them should be large enough to afford both personnel who specialize in
preparing poor women and those who specialize in loan approval and managing the
post-investment compliance of poor women. With enough funds
to satisfy a quantity of credit adequate to generate enough interest to sustain
the NGO.
Note: The erudite funding plan designed for us
by Bart Van Eijk. (http://arribaya.com/bart12/)
could not have for seen what the microfinance NGO, Manuela Ramos, would do with
our women, nor that we would have to lower our interest rate to compete with
Manuela Ramos and others, etc.
Status of ArribsaYa as a registered Non Governmental Organisation -
Due to the
above mentioned obstacles to our operating as intended pursuant to Bart`s plan, it became apparent that the cost of
maintaining the infrastructure of a separate NGO for the Arriba Ya project was not justified, and so the NGO was closed and
Arriba Ya became a project withing
the Bruce Organisation.
Utilisation of and current disposition of funds
raised for the Arriba Ya
project
For
disposition of funds loaned to and received from poor women in the Arriba Ya project, see the two tables presented at the beginning
of this report. The last disbursement of funds under the “loan/investment”
phase of Arriba Ya`s evolution was made on Thursday,
20 August. 2009.
Arriba Ya operating costs during the year since funds started to
arrive in response Bart`s initiative.
Note: The Arriba Ya
Project has been in operation for nearly three years, but the statement of
income and expenses set out here, reflects only the year from 01 August 2008
through 31 July 2009.
Income / Loss Statement (Stated in
New Peruvian Soles):
Interest S/
2,085
Expenses
Staff (photos below)
Pedro (80% of his income) 12 months S/ 8,384
Charo (50% of
her income) 12 months S/
5,240
Victoriano (100%
of his income) 2 months S/
1,000
Transport S/
1,050
Recruitment promotion and publicity S/ 2,500
Overhead and Administration S/
3,918
S/
22,090
(S/ 20,007)
Current Financial Posit-ion (Stated in New
Peruvian Soles):
Donated
capital (Not counting what Bruce put in 07&08 before Bart) S/ 59,200
Loans
outstanding which we expect to recover S/ 2,000
Cash on hand
S/ 5,707.55
Result of ArribaYa one year operatins (S/ 20,007)
Funds committed
by Bruce Organisation (exclusively to fund start
up of Potato and/or Blue Green Jeans projects –
Co-operatives) S/ 31,485
Future
operation of ArribaYa
What we will not change:
We will
continue to work with communities of women pertaining to parishes and
congregations in the same way we have been working since October 2008. The only
difference will be that the two members of our permanent staff who handled both
the preparation and after investment
Relationship
with the women will henceforth work solely in recruitment and preparation of
the women. Administration of accounts will be managed by the existing
accounting staff. A new team member who previously worked for 20 years managing
the assets of a small bank (and therefore worked for Ana Teresa for some of
those years, when she was the second officer in the same bank – and she is
therefore aware of his skills and integrity) will be responsible for
collections.
Principal changes:
-
We are negotiating with Micro Finance NGOs and small
banks which were until recently micro finance NGOs themselves, with a view to
maximize the effectiveness of our recruitment and preparation team. The team
will concentrate only on recruitment and preparation, and leave account
management to others. They will first recruit and train women who will enter
our single purpose communities, and they will also recruit and train women who
do not pertain to an existing community. When these women are prepared to the
team’s standard they will either be presented to one of the aforementioned
micro finance NGOs, shepherded into a relationship with a small ex micro
finance bank or else be placed in a desirable job. (See attachments, at the end
of this report)
Note: We feel no conflict or disappointment in
this adjustment since our mission and our reason for starting Arriba Ya in the first place were simply to help as many women out
of poverty as possible. We view this adjustment to our previous modus operandi as
utilization of our most effective tool and best asset is the service of
reaching that end.
-
Arriba Ya will remain within
Bruce Org. as a community development / poverty eradication project, and will
not be set apart in a unique NGO.
-
Funding for the part of ArribaYa’s
budget which will exceed the amount that can be realized from small scale
funding of micro enterprise projects through the single purpose parish
communities will either be directly fund raised or else requisitioned from the
general budget of Bruce Org. The latter can be justified under the Bruce Org.
mission statement because it has already been demonstrated that by lifting
mothers of out-of-school children into a position where they can support the
families by their own earnings; the children are freed from child labor and can
enter school.
Note: The main project of Bruce Org., to get
out-of-school children into education is currently enjoying success and rapid
growth.. We hope this will soon translate into greater
financial supports, from which ArribaYa might also
benefit.
-
ArribaYa has plans,
and is proceeding in them, to advance in business. Different projects are on
the line. In these projects the socias will play a
key role. They will enjoy a lot of responsibility and will be co-owners of the
project. Two projects are expected to advance; hand-sewn, ecological jeans and
potato seeds. More on them will follow in a next report as this is where most
of the remaining funds will be dedicated to.
Personal
statement
I am an
economist with more than 40 years in this sort of work. I was trying micro
finance before Muhammed Yunus
taught us all how to do it right. My only successful micro economic development
projects so far have been in small villages in Africa and
We now prepare the women the same as always, but when they are ready to have their
start-up micro enterprises funded, we present them to our friends at CrediChavin, who
fund the small loans the women require to get started. The result for the women is the same.
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