Santo Tomas gets a Micro-Loan program

Thanks to a program set up by Andrew (a WWU student missionary), we have a micro-loans program here in Santo Tomas. This program was established last September, and has slowly grown with both members and the area that it covers. It is a different entity from The People of Peru Project. The idea is simple, find a need with people who want to start or further a business, give them education, support and then money to fund it.

We have been primarily focusing on women, and there are certain requirements that need to be met. We operate in groups of 5 individuals whom are required to come to weekly meetings. Repayment has been over a three-five month period, with payments being made every Monday. Each individual in the group receives about $100.00 USD, with a 10% interest rate –if they make every meeting and payment on time, we will give them 5% back as an incentive in the end. This works to their advantage as well as ours –they also become eligible to be apart of the next group. We operate with minimal fees and no collateral. In the event of no-repayment, we try to work out an easier repayment plan or we ask for their DNI card (this is their government issued ID, and they are required to have it for most anything) until the loan is repaid.

Groups take on the form of a family. Meetings last anywhere from 1 – 2 hours, and are held in a members house. Topics include simple business ideas and help (everything from taking inventory to making intelligent purchases), health issues (everything from drinking clean water to ways around depression), and games (everything from ice-breakers to UNO and volleyball). A secretary, voted in by the members, assists in taking payments, attendance, collecting signatures, etc… Meetings always start with prayer, worship and then are followed by telling everyone how their life/week has gone. Meetings are informational, laid back and fun.

Micro-loans can be challenging. The more involved you get with a society, the more you want to help. With people, finding want is not the challenge, it is finding need. We have faced challenges from the culture, finding the appropriate rules, inadequate funding, shortage of time and people, and creating a system that is far different than anyone around here has ever known. One thing is certain, micro-loans work. They help people. We create a safe environment for borrowers who have access to low interest loans (from our research, most loans have interest rates of upwards of 20% and require substantial collateral), education (learning about appropriate purchases and health) and friendship.

Here we are after going to town in order to look for a bank. These women have never had a bank account, nor have they ever thought about having one. We went to a few banks, but quickly found out that was a bad idea. We decided to start our own bank. I will explain more later.

Here is one of our ladies, Meredith, selling food with her daughter outside her house. She sells food outside her house starting at 5 am, and sells all day until about 10 pm at night.

Here is another one of the ladies, Teresa. She runs a small little bodega (store). She also makes butterflies to sell to a painter, who then in turn sells them to tourists.