By Karl Baumgarten KF10, Lima, Peru
I arrived in Lima at 3am Sunday, pretending to be ready to start my second fellowship with EDAPROSPO in just 4 hours. After 2 hours spent regretting my poor planning in the customs line, I hailed a cab and whizzed through Lima’s empty streets to my hospedaje. A few hours of restless sleep and a cup of instant coffee later, I hailed another cab, although in an altogether different Lima. The quiet tranquil city I had seen just 4 hours earlier had transformed itself into a city bursting at the seams with taxis, combis, buses and people somehow navigating the controlled madness.
We arrived at EDAPROSPO head office with a few phone calls and advice from the helpful Limeños who all seemed to point us in opposite directions, though always with an unfailing smile. EDAPROSPO is a large MFI who has been a Kiva partner for a few years now. EDAPROSPO is part of a larger umbrella organization, Prosperidad, working to serve Lima’s poor. EDAPROSPO is the microfinance arm of Prosperidad whcih provides credit to low-income entrepreneurs in the greater Lima area. The Lima microfinance market is a saturated one, with numerous operators all competing for clients. This competition has helped lower interest rates and has resulted in clients having a range of loan products from which to choose. Some critics of microfinance have argued that saturated microfinance markets like those in Lima are resulting in client indebtedness or debt cycles however evidence for this is scant. Rather it is more likely that like most industries where competition is fierce, prices fall and services improve. EDAPROSPO competes by offering low interest rates, fewer requirements and innovative loan products. One of these innovative loan products are education loans for those university age students whose parents are also EDAPROSPO clients. Another loan product they are piloting are loans for microfinance groups where the maximum age is 26. This loan is seeking to target those young women who are often excluded from more established microfinance groups but still have entrepreneurial drive to make them very successful clients.
During my next 3 months here, I will be helping EDAPROSPO set up a journaling process and increase their journaling percentages. I look forward to bringing you some of the inspiring stories these entrepreneurs have to tell. In the meantime, how about lending to an EDAPROPSPO entrepreneur here or join our lending team here./>