As I described in a previous blog post, EDESA (Kiva’s field partner in Costa Rica) works with a network of Community Credit Enterprises (ECCs by their Spanish acronym). To reiterate a bit, the ECCs are small, grassroots microfinance organizations formed by rural community members. FINCA Costa Rica provides extensive training in these communities to teach members how to work together to create and run a profitable business that provides financial services among other things. I recently visited one of the oldest and largest ECCs, La Asociación de Productores de El Sauce (The Association of Producers of El Sauce – El Sauce for short).'
This ECC is a phenomenal example of what people can do with just a little money, a little training, and a lot of motivation. The El Sauce ECC started about 17 years ago with only 13 members and no money. They quickly grew to 23 members and Finca provided them with their first loan: just over US$1,100 to invest in farming projects across all the members. Over the years they have grown steadily and currently have 136 members holding 531 shares and have given a total of 2,062 microloans.
The beauty of the El Sauce ECC, however, is not just the manner in which it has provided financial services to the community, but how it has used the foundation of the ECC to expand in many ways. As the enterprise became profitable, the members decided to reinvest some of the profits in establishing a formal office and purchasing equipment such as computers and printers. Now, in addition to providing loans, the El Sauce ECC office serves as an internet café, photocopy and printing center, classroom for computer courses taught by a local Peace Corps volunteer, and more. This not only provides useful services to the community, it also generates more income for the ECC, which can be utilized to provide more loans, other services, and/or dividends paid out to the members.
But some members didn’t stop there. Building off the idea of pooling resources to create a business for everyone in the community to benefit from, 10 members recently formed a diary producers cooperative. They have constructed a small cheese factory where local farmers can bring their milk to sell. The milk is then made into cheese and sour cream, which have a much higher resale value, thus generating more income for the local farmers. The factory also employees four people in cheese production.
FINCA’s goal is to equip rural Costa Ricans with the knowledge and skills to form a successful enterprise. They teach the power of collaboration and of pooling resources. The community of El Sauce has applied these invaluable lessons on so many different levels and members are regularly investing in initiatives that will continue to grow and provide benefits for years to come. EDESA and Kiva are providing additional financial resources to these industrious entrepreneurs to help facilitate this growth. It truly is an amazing thing to witness!
Follow these links to see the borrower profiles for a few of the Kiva borrowers from El Sauce. Make sure to scroll down the page to read the journal updates and watch more short videos of their work.
If you’d like to hear more about microfinance in Costa Rica, join the EDESA lending team, Pura Vida Costa Rica. Also be sure to visit this link regularly to see any fundraising loans for Costa Rican microentrepreneurs.
Megan Tatman Montgomery is in her fourth and final placement as a Kiva Fellow. Prior to EDESA, she served at Friendship Bridge and FAPE in Guatemala and ADEPHCA in Nicaragua. Please feel free to contact her at email@example.com with any questions, comments, or requests for future blog posts./>