The Case for Nicaragua

By Victoria Kabak, KF9, Nicaragua

As I finish up my placement as a Kiva Fellow in Nicaragua, there is one question that I didn’t know the answer to when I arrived and that still confounds me three months later. Why isn’t Nicaragua a more “popular” country to lend to on Kiva?

The average time to fund a loan on Kiva to a borrower from AFODENIC, the microfinance institution where I’ve been a Kiva Fellow here in Nicaragua, is 5.65 days, almost 2.5 times the overall average (this information can be found on any partner page, under the “Loan Characteristics on Kiva” heading). Of the first 14 loans to expire without being fully funded in the history of Kiva, six of them were to Nicaraguan borrowers.

Nicaragua is the #1 poorest country in Latin America, with the second lowest per capita income in the entire Western Hemisphere, after Haiti (and a 2009 article in Latin Business Chronicle declared Nicaragua worse-off than Haiti based on figures released by the IMF). Despite its proximity to the happiest country in the world and the similarities the two countries share in terms of tropical climate and natural beauty, a history of political strife and fairly recent revolution – only 30 years ago – has kept Nicaragua (very far away) from enjoying the relative prosperity of its neighbor Costa Rica. As of 2005, the poverty rate in Nicaragua was 48 percent.

On a daily basis in Managua I pass by houses constructed of a combination of metal sheets and cardboard, and I have visited borrowers in houses like this too—homes where curtains are hung to separate rooms because they can’t afford walls. Right outside of the capital many of the roads that Kiva borrowers live on are pure dirt, no gravel (not even what I’d usually refer to at home as a “dirt road”), comprised of rut after rut and strewn with garbage, making them virtually impassable in anything but a pick-up truck. I have met borrowers who work all day making tortillas, which they sell for 1 córdoba each, less than five cents, and borrowers who had to start selling Avon products because their other two jobs weren’t bringing in enough money. I’ve met 13-year-old girls who spend their summer vacation (November-February) trying to sell bracelets for less than $1.50 each at beaches where there isn’t anyone to sell bracelets to.

A house I passed in Managua

And I think this has been only the tip of the iceberg. Much of the entire eastern part of the country has such poor infrastructure that is virtually unreachable.

Nicaraguans have to contend with the added obstacle of their country being somewhat prone to natural disasters. Managua, the capital city, experiences a major earthquake every 40 years or so (the last one was 37 years ago last month–I’ve been holding my breath the whole time I’ve been here). Just two months ago, in early November, Hurricane Ida ravaged Nicaragua’s Caribbean coast, and Hurricane Felix back in 2007 did the same. And farmers, especially in the northern part of the country, have been plagued by an ongoing drought that devastated many of their crops. Overcoming poverty becomes an even greater hurdle when nature is working against you.

Yet despite this level of poverty, the staff at AFODENIC wonders what they can do to improve their borrower profiles on Kiva so that their loans get funded faster, because they know some other Kiva partners have all or almost all their loans funded within a day of being listed. As I said earlier, I don’t have a real answer for why this is. Perhaps it’s because the first places that come to mind when you think about poor countries are places like Haiti and countries in Africa and not Nicaragua. I think Nicaragua is a fairly low-profile country in that it hasn’t made many appearances in the news in recent years (when was the last time you heard about it since the Iran-Contra affair?) and really isn’t on people’s radars very much.

But this is a country where the fact that nearly all homes in the capital city are without hot water in the year 2010 pales in comparison to the fact that a third of the country’s citizens did not have access to “sustainable sources of drinking water” as of three years ago. It is a country where shockingly large portions of the population are both malnourished and cut off from access to health services, and these percentages rise when you look only at indigenous populations or those living in the autonomous regions in the eastern part of the country: the rate of malnutrition is higher than 50 percent in the parts of the country where most of the indigenous population lives, and only 25 percent of that population has access to health services. (Statistics from UNICEF report.)

While Nicaragua needs to invest in education, in health, in the tourism industry – Nicaragua has a lot of the same things to offer tourists that Costa Rica does yet has been unable to capture this market – the percentages of the national budget set aside for social spending and poverty eradication decreased between the 2009 and 2010 budgets.

In light of everything I’ve seen, heard, and read while I’ve been here, I still don’t know the answer to my question about Nicaragua’s standing on Kiva. But as social spending is cut and the country slides from being the second-poorest to the first-poorest country in the western hemisphere, the good news is that Kiva continues to help struggling Nicaraguans and that you too can invest in Nicaragua on Kiva.

As of the end of today, Victoria Kabak will have completed her Kiva Fellowship at AFODENIC in Managua, Nicaragua. Check out AFODENIC’s currently fundraising loans on, or show your support by joining the “Amigos de AFODENIC” lending team. Thanks for reading!


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