Recession-proof

By Shereef Zaki, KF9, Perú

As my first week working with EDPYME Alternativa, one of Kiva’s newest partners, draws to a close I can think of only one phrase to describe the world of micro-finance: recession-proof. Having just come out of the economic and political turmoil caused by the so-called, “Great Recession,” in the US, the vitality and celerity of micro-businesses is cast into even greater relief.

I want to begin by introducing you, the Kiva community, to EDPYME Alternativa. Born of an effort in the Peruvian Chamber of Commerce, EDPYME Alternativa is a highly effective and organized MFI whose mission is to improve the living condition of its clients by supporting their entrepreneurial activities, generating employment in the small and micro enterprise sectors, and strengthening the financing for sustainable and profitable businesses in the region.

In addition to issuing financial products like loans EDPYME Alternativa also provides the following services for its clients: bi-yearly medical checkups, agricultural capacitation workshops, technology training workshops, and sales workshops.

And to maintain their presence in the community EA also holds an annual “Chocolatá” where they give out chocolate and presents to the children of their least fortunate clients and clothing to the adults. Additionally, they collect clothing and supplies for clients who are the victims of natural disasters such as the cold snaps, heat waves and earthquakes common to this region.

In spite of having been here only a brief amount of time, EDPYME Alternativa has already demonstrated to me the the recession-resistant nature of microfinance. They lend regardless of crisis and focus on the well being of their clients. This is a world that lacks Best Buy, Wal Mart, Staples and Barnes and Noble. Goldman Sachs, JP Morgan and the other institutions that line that gilded casino known as Wall Street have peripheral influence here.

In their place envision hundreds of small businesses and stalls that are owned by individuals so that if you walk ten steps in any direction you can always find exactly what you are looking for. For your food shopping and hardware you go to small informal vendors in the main market, El Mercado Modelo, or scattered around town. Welcome to the urban economic landscape of Northern Perú.

Businesses here have no shareholders and no stock options. Some people would call them undercapitalized, and yet the presence of institutions like EDPYME Alternativa gives them enough capital to turn a profit. When there is a recession in Northern Perú, people still need to eat bread, buy corn, recharge cell phones, repair their cars and buy schoolbooks. And because so many are self-employed a tangible series of economically interdependent links materializes.

And greasing the wheels of this sustainable micro-economy and the community it supports are lenders like you. One could make the argument this area is in a state of permanent recession, but the grit that coats the developing world belies the resilience of its entrepreneurs. Northern Peru’s communities rise slowly with dignity and intention, supported by responsible institutions and compassionate individuals who have shown themselves to be recession-proof; impervious to the fear caused by a worldwide economic crisis you still lend to those who need it most. And the gratitude I have witnessed for your contributions defies measurement.

**************************************************

Shereef Zaki is serving as a Kiva Fellow working with the new field partner EDPYME Alternativa in Chiclayo, Perú

To view currently fundraising loans from EA click here

To become a member of the “Friends of EDPYME Alternativa” lending team click here

/>