Banking on poor women Bankers: A Baltimore Catholic charity's loan programs turn poor Ecuadorean women into entrepreneurs.

March 30, 1997|By Ernest F. Imhoff | Ernest F. Imhoff,SUN STAFF

SANTO DOMINGO, Ecuador -- Thirty poor women in a steamy lowland suburb of washboard dirt roads have become businesswomen.

That event may fall short of a miracle. But for 15 months, Catholic Relief Services (CRS) of Baltimore has helped them bring home income that does more than pay rent and buy clothes and food. In the macho world of Santa Teresita, their roles as breadwinners make the men stand up and notice.

Their new status is one small result of a worldwide movement that favors lending money to poor women over men. The women have been found to be better credit risks because of their heightened sense of family responsibility and because they are better able to create small businesses for unselfish purposes.

A thankful Edison Arteaga stood up after recovering from a back injury to begin using a new saw motor in his carpentry business. The motor was bought with money that his wife, Maria Carlotta Rosero, made by getting a small business loan to raise and sell chickens.

"It's very beneficial for our family," Rosero said of her chicken enterprise.

"For sure," agreed Arteaga.

Their four children giggled as they watched over the chickens. Nearby, hens laid eggs, and a cat suckled kittens.

The family's home on the outskirts of Santo Domingo is part of a tropical agriculture center in Ecuador's western lowlands. Bananas are the key crop in this crossroads city. Major roads go east to the Andes and Quito, the nation's capital, and west to the Pacific Ocean.

The trend, called village banking or microcredit, creates banks for the bankless, mostly women who would get nowhere going to traditional financial institutions. CRS has helped make possible a system of market-rate loans allowing individuals to begin or expand businesses.

"We all have enough experience to know that loaning money to women improves family's lives," said Christine Tucker, CRS regional director in Latin America and the Caribbean.

Banking by women brings benefits beyond economics. Respect, dignity and healthier homes are cited by Tucker and hundreds of lenders in similar programs worldwide. She quoted one borrower in a coastal town in Ecuador: "It's not just more money and more goods. My husband doesn't hit me anymore."

CRS, a presence in Ecuador since 1956, began in 1943 as a wartime charity to help refugees. It quietly works in more than 80 countries to help the poorest people get access to the goods and benefits of mainstream society.

Besides banks, other projects of CRS in Ecuador include agriculture and primary health care.

Overall, in 1996, CRS reported $3.8 million in small business loans that were dispensed to 33,517 borrowers, nearly all women. They ran businesses with loans from 1,740 village banks in 22 countries in Latin America, the Caribbean, Eurasia and Africa.

The approval voiced by Rosero and her husband Arteaga was echoed by a half-dozen members of the Santa Teresita bank. All the borrowers but one are women.

Similar to credit union

CRS banks such as those in Ecuador operate somewhat like credit unions in making loans to members but are much more structured, said Barbara Myers, CRS director for program quality and support.

For example, the banks have weekly repayment schedules for four-month loans. Subsequent loans are tied to the individual borrowers' saving money for themselves and to provide the bank's capital, she said.

"Poor people using the CRS banks pay market rates," Myers said. "They don't need special treatment in the form of concessionary interest rates."

By keeping the rates the same as those of commercial banks, which vary from country to country and within countries, the banks can become self-sustaining, she said.

Until now loan sharks charging 300 percent to 400 percent interest have been the only alternative source of financing for many poor people.

The funds for the banks come from several sources: CRS, which relies on private donations and U.S. government help; the Santo Domingo Roman Cathoic Diocese; the Donum Foundation; and others.

The banking approach is novel in this part of Ecuador, where many live just above, at or below the local poverty line, which is 900,000 sucres, or about $225, a year. In many parts of greater Santo Domingo, only 25 percent of adults are fully employed.

The diocese has 12 village banks, each with about 30 clients. The variety of the prospering enterprises can be seen in the endeavors of three other Santa Teresita women , all in their 40s with families: Clothes designer Eliza Salas, who is separated from her husband, expanded her business, bought a new sewing machine and indulged her seven children. Now she can buy a greater selection of fabrics to make their clothes, school materials and more household goods. She also hopes to add flowers to her wares for sale.

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