As a Kiva Fellow, I was placed with AFODENIC, one of Kiva's Field Partners in Nicaragua. My work was to provide support and transparency into the Kiva lending process. As you may know, all entrepreneurs on Kiva's web site are supported by local Field Partners, or micro-finance institutions (MFIs) like AFODENIC, who are Kiva's liaison between Kiva lenders and Kiva borrowers. MFIs choose which of their clients are eligible for Kiva funding, write and upload borrower profiles, disburse loans, collect repayments and write journal updates. AFODENIC is one of six Kiva Field Partners in Nicaragua and offers interest rates lower than many other institutions in the country.
You are receiving this e-mail because you have made a Kiva loan through AFODENIC and we thought you might be interested in learning more about this Kiva partner. AFODENIC is one of Kiva's most innovative partners in the region and they offer a wide variety of loan products to address client needs and mitigate poverty. AFODENIC's loan products are individualized to client's needs and range from typical business loans to Agricultural, Student, Institutional, and Housing loans. A large part of my job as a Kiva Fellow is visiting clients to both gather information and ensure transparency in the lending process. I found these borrowers' stories and loan use especially inspiring and evocative of the micro-loan products offered by AFODENIC.
AFODNIC offers a variety of Agricultural loan products with different repayment plans and loan amounts depending on the agricultural activity and preference of the famer. Francisco cultivates 1 Manzana (about 2 acres) of land in prime Pineapple growing territory. Pineapples are a major cash crop in Nicaragua but Francisco was barred from entering the lucrative market because of the costly inputs and long-term investment that a fully mature pineapple crop requires. The upfront investment for Pineapples is much more costly than other crops because they are grown from 'hijos' or small starter plants and require large amounts of fertilizer. Another challenge to a small farmer like Francisco is the 18 months Pineapples take to mature. AFODENIC has addressed the needs of pineapple farmers by offering bullet repayment plans, or loans designed to be paid back in a single lump sum after the harvest. A Kiva microloan of $225.00 enabled Francisco to invest in a pineapple crop and maximize the economic potential of his land. Francisco does not have to worry about paying back his loan until after he harvests his pineapples. AFODENIC offers agricultural loan products that understand the crops grown and design payment plans to maximize the success of small farmers.
AFODENIC also offers more traditional business loans to help entrepreneurs overcome investment costs, increase product inventories, or improve their technological capacity. Juana Ortega has been a seamstress for 40 years. She sews new clothes, makes clothes to order, mends, alters and fixes clothing for people in the surrounding community. She used her Kiva loan to purchase a commercial grade sewing machine that allows her to improve the variety and quality of clothes she can produce. Juana can gradually repay her loan from the increased profits that the new sewing machine allows her. Juana explained to me how she timed her loan to coincide with the holiday season when there is more demand for her services. The improved sewing machine has already allowed Juana to meet the increased demand and take on more work. A loan from AFODENIC enabled Juana to continue growing her seamstress business, respond to seasonal demand and overcome the technological barrier of a new more modern machine.
Housing loans are a very popular product from AFODENIC. Most families in Nicaragua build their home in stages and gradually improve their homes as money is available. Many families long term goal is to improve their home and it is one of the more tangible ways a family can measure their progress out of poverty. Managua was flattened by a 1972 earthquake and hit hard by hurricane Mitch in 1998. The city is slowly being rebuilt and housing and infrastructure loans have played an important role. Melania is a long term AFODENIC and Kiva borrower. A series of loans over an 11 year period has allowed Melania to gradually improve her home from a cardboard box to a spacious and comfortable home. To build her home Melania has invested loans to increase profits from her sewing and cosmetics selling business and also invested loans directly into home improvement projects. She used her last loan to begin construction on additional rooms she can rent out for extra income. Melania has come a long way from humble beginnings and microloans have been integral to her home building project and the greater security and comfort for her family.
Institutional loans, or loans backed by employee's salaries, are also an important part of AFODENIC's Kiva Portfolio. Institutional Loans automatically take repayments out of the borrowers monthly pay check and so are guaranteed by the borrower's place of employment. Institutional loans allow low paid salaried workers to access loans through a much simpler process and without much collateral. Aquiles Adalberto works for the city of Juigalpa as a dump truck driver and is currently working to repave a major city road. Though he has stable employment as a municipal worker he is still unable to use the high loan amounts and massive amounts of collateral and documentation required for a loan from a commercial bank. Aquiles is on his second institutional loan from AFODENIC and the loans have helped him both to improve his home and respond to life's challenges. He used a large part of his last loan intended for home improvements, to pay the hospital bills of his wife who is sick and requires gallbladder surgery. Because his loan repayments are guaranteed by his employer Aquiles has been free to use his loan to respond to shocks that have confronted his family. With his next loan he hopes to get back on track to improving his home.
Student Loans are an increasing part of AFODENIC's Kiva Portfolio. Student loans are used in a variety of ways by AFODENIC borrowers from buying supplies such as a laptop or school uniform to paying fees and tuition at Universities. Demand for Higher Education loans is especially high in Nicaragua because huge titling fees are levied on students before they can graduate and receive their degrees. Marisela requested her eighth loan so that she could buy a laptop computer and pay the processing and titling fees associated with her law degree. With her degree Marisela has been able to transition from working as a civil litigation clerk to working as a fully certified attorney. Marisela is a single mother of four boys and has used a series of loans and hard work to get where she is. Aside from student loans, Marisela has also used loans to improve her home and purchase materials to increase her income from a side business working as a seamstress. Marisela is a great example of both the resilience of Kiva borrowers the versatility in loan products offered by AFODENIC.
AFODENIC is constantly innovating and looking ahead. With your support they continue to expand their loan products and improve upon their goal to improve the conditions of poverty in Nicaragua. I hope you will continue to support AFODENIC's great work. Keep an eye out for AFODENIC Green Loans on Kiva coming in the New Year!
It has been an honor working with Kiva and the entrepreneurs in Nicaragua.
Saludos,
Kiva Fellows 16th Class
