Josh Wilcox, KF10 Ecuador
Throughout my Fellowship in Peru and now in Ecuador, I have been bestowed the opportunity to launch Kiva partnerships with 2 microfinance organizations and teach loan officers in various communities how to administer loans and interview borrowers. However, after visiting the town of Chillanes, Ecuador with new Kiva Field Partner Cooperativa San José, this time I didn’t leave with the exciting feeling that I am helping bring the Kiva support and hopefully positive change to more people in underdeveloped communities.
Chillanes is a small, rural cantón (county) of 18,000 inhabitants in the Andes Mountains. Upon my arrival, I was told that it is also the third poorest cantón in all of Ecuador, which is quite significant given that Ecuador consists of 226 cantones. Needless to say, the conversations I had with the borrowers of Cooperativa San José turned a bit more somber when the discussion turned to business goals and dreams for the future.
The vast majority of these residents work in agriculture, harvesting corn, potatoes, and beans, among other produce as their only form of income. While the land is very fertile and they encounter no unusual additional challenges compared to other farmers in the province, the area in Chillanes suffers from a severe lack of commercialization. Too often are the farmers of Chillanes taken advantage of by the comerciantes (traders) who purchase fruits and vegetables in the markets and transport them to the surrounding cities to sell for a much higher price, pocketing the profits. The comerciantes often work as a team with each other, agreeing to only buy from the farmers at low prices. This often allows them to sell the fruits and vegetables they obtain for as high as a 100% markup to distributors or markets in other cities. The farmers, however, have not organized themselves efficiently and thus must resort to selling to the comerciantes at the low prices since they have extremely limited trading options. “After laboring for 10 months in the fields to harvest our corn and potatoes, and then to get ripped off in the end just isn’t right,” claims one borrower. “The prices of the products are so low right now.”
After an extensive discussion with William Silva, the head of the Chillanes branch office of Cooperativa San José, I learned that what is severely lacking in Chillanes that exists in other areas is a centralized distribution and communications network to link the farmers of the high-quality produce to the buyers in the major markets such as Guayaquil. William says that the first step would be to create a centro de acopio (collection and distribution center) and improve the methods of communication to expand commerce to other parts of the country. In contrast, further south on the coast less than 2 hours away, extensive banana plants as far as the eye can see are being cultivated to ship all over the world.
So why hasn’t this already happened? What barriers are stopping them? The biggest obstacle, from what I gathered from my friend William, is not an extraordinary hurdle, but rather themselves. People in Chillanes have become accustomed to and complacent in their economic situation. They lack the motivation to come together and invest in creating better trading opportunities. The 5- or 10-year business plans that are so commonplace in American society have not been instilled in the minds of most people in third world countries. They have more immediate needs at hand, such as ensuring food and shelter for their family and trying to put their children through school.
Another idea to jumpstart the economy would be to increase tourism. Currently, the small town is old and relatively bare, but the surrounding landscapes and nature are picturesque. The neblina (layer of fog) appears below Chillanes like a soft pillow across the hillside and the views from Chillanes are famous within the province. Marketing the beauty and attracting the attention of domestic and international tourists is a much more difficult task to take on, however.
At the end of one borrower interview, after hesitantly asking the question about hopes and dreams, I was told, “I once had a lot of hopes and dreams, none of which I have been able to realize.” By beginning to administer Kiva loans to those in obvious need in Chillanes, I am hoping we can at least start to provide a small piece of the support they need in order to help them help themselves.
Josh Wilcox is serving his second and final Kiva Fellows placement with the KF10 class at new Kiva partner Cooperativa San José in the Bolivar province in Ecuador. There are currently fundraising loans available so please consider helping the farmers of the Bolivar province in Ecuador here. Also join the recently created lending team here.