First Rains on Shaky Ground

by Kati Mayfield, KF11 Chile

Things have settled down in Chile – somewhat. At least once a week there’s another strong “réplica”, or aftershock, from the February 27 earthquake, that gives people jelly-legs and sets off anxiety attacks. Buildings are being gutted and have their innards strewn on the sidewalks as they await new walls and roofs. The previous inhabitants of these retail or living spaces have taken up business under tarps on the street, and have taken up residence under tarps on the outskirts of the cities. For the most part, they have proudly resumed a sense of normalcy, although of a very different flavor.

In the last two weeks the first heavy rains of winter arrived in Santiago and the southern cities affected by the earthquake, which put to the test this semblance of normalcy. Those fortunate enough to be in their homes crossed their fingers and prayed that their shaken roofs didn’t leak; and the Chileans living and/or working in tents gritted their teeth and prayed for winter to spare them a few more weeks to put up “mediaguas” (semi-permanent housing structures).

The consensus here is that direct government aid was slow and poorly organized. In the city of Talca, in the Maule region (one of the most severely affected), for example, government trucks carrying food and water supplies did arrive – but five days after the earthquake, and the precise day that the city water got turned back on. “It’s better late than never, though” commented one pedestrian just last week in the city of Curicó, as we watched a government truck loaded with wooden pallets (destined for mediaguas housing) rolled down the street.

Some state-sponsored projects have already taken effect, like the Banco del Estado’s (Chilean National Bank) projects to reach out to affected customers. As part of its “Levantemos juntos nuestro pais” (Together We Lift Up our Country) campaign, the bank has offered some repayment leniency to the clients in severely affected areas. It also covers all of its mortgage loans with a seismic insurance plan, and has been actively publicizing these policies to encourage its clients to make claims against the earthquake damages.

Smaller institutions, like Kiva’s field partner Fondo Esperanza (FE), have been admirably quick at choreographing their emergency response, and have also been productive channels for funneling government aid. FE, its parent organization Hogar de Cristo (a nationwide social service institution), and the Banco del Estado have teamed up with Un Techo Para Chile (A Roof for Chile) to bring mediaguas to affected populations. These mediaguas are especially important as winter settles in, and FE is amping-up its efforts: thanks to a grant from the Chilean Ministry of Planning they will be constructing an additional 2,000 mediaguas for clients who lost their homes.

Twelve of FE’s 30 offices are in earthquake-affected areas, and immediately after the earthquake the organization sponsored “basic-needs” boxes and distributed them to these communities. FE loan officers arriving with supplies were the first point of contact for many FE clients, who were without power and phone service for the first week after the earthquake. Additionally, FE funded 41 soup kitchens and sent part of their staff to participate in immediate and follow-up cleanup and construction work. Those who remained in the office formed committees, reviewed accounts, and developed FE’s new portfolio of “Medidas Crediticias Para Emergencia” (Emergency Credit Measures).

Examining each individual “socio” within the communal banks, the committees divided these clients into three different categories of need. The homes and businesses of Category-A clients were either completely destroyed, or damaged to the extent that they were deemed uninhabit/inoperable. Category-B clients suffered minor to moderate damages, but were determined to be capable of maintaining productive activity. The homes and businesses of Category-C clients suffered no structural damage, though they may have lost a small amount of merchandise.

For the month of March, FE gave all communal banks in affected areas a five-week “prórroga” (grace period), during which bank activity [weekly or bi-weekly meetings during which socios make repayments and receive business training] was suspended. To Category-A clients, FE offered to freeze the client’s debt for a period of up to six months, during which they may receive either an additional short-term loan; or a “capital de semilla” (seed capital), an institutional grant. FE will also offer refinancing plans to groups whose members fall in categories B and C, allowing them to repay the last two or four quotas of their current loan out of a new loan. To focus on maximizing service to active socios, FE loan officers in affected areas have not been forming new communal banks [ie: not distributing entirely new loans], but they have encouraged in-need entrepreneurs to join up with existing groups.

Ten of the 33 FE communal banks on Kiva took advantage of the prórroga, and though most of them have resumed commercial activity and repayments, some delinquencies will be reflected on Kiva’s website. Only two of these ten banks include clients ranked as Category-A and B, which is impressive considering that as much as 60% of the population in some of these communities lost their homes. This means that everyone knows someone who lost everything; the more fortunate FE socios are pooling their resources to help their friends, family members, and neighbors pick up the pieces.

At a recent nation-wide staff gathering, FE’s internal director commented that the earthquake gave the institution a unique opportunity to show Chile and the world its ability to respond to the needs of the community. He commended the team [240 employees in attendance at the event] for responding well in a time of crisis, as they continue to spend their weekends assembling mediaguas, serving in the soup kitchens, and reorganizing loan portfolios.
As for the FE clients: “You know what?” said Paola of the Blanca Estrella communal bank, “you could run us over with a giant truck, and would we lay there smashed on the street, complaining? No, we would get up, and keep going!”

They are, indeed, peeling themselves off the pavement and out of the rubble with spirit and with “FE” (faith).

“Fondo Esperanza” means Hope Fund. Click HERE to contribute to the spirit of faithful hope by funding a FE communal bank through Kiva.