The Cows of Cochabamba

June 17, 2009

By: ashleyolivia

By Nick Cain, KF7 Paraguay

In Cochabamba, Bolivia, milk is quite literally the ticket to financial services and economic growth. Kiva lenders, meet CIDRE, your newest Field Partner in Bolivia. Last week I traveled from Asunción, Paraguay to Cochabamba, Bolivia to train CIDRE’s staff members on the Kiva platform, help them learn a little about the Kiva community, and make sure they had everything they needed in order to start connecting their borrowers to Kiva lenders.

: A panoramic view of Cochabamba

The staff was enthusiastic to get to work and learn more about Kiva, so Day One of my visit was all training sessions and PowerPoints. But on Day Two, CIDRE’s new Kiva Coordinator, Diego Cardona, and I set off for the outskirts of Cochabamba to meet some borrowers. Most of CIDRE’s loan products are geared to serve the region’s dairy farmers, a community of micro-entrepreneurs who own anywhere from 5 – 25 cows and earn income by selling milk to Pil, the region’s lone dairy corporation. Cochabamba’s dairy farmers are concentrated in a large swath of land behind the city’s airport. About 10 minutes after leaving CIDRE’s offices in the city center, paved roads gave way to a lumpy, dusty web of cinder-block houses and muddy cow pastures. Eventually Diego and I came to a stop, eye-to-eye with a couple of rather hefty bovines.

Outside the home of one of his clients, Diego told me a bit more about how dairy farmers are able to access CIDRE’s financial services. It was a classic lesson in how the microfinance industry finds innovative ways to bring credit to those who are usually shut out of the financial system. Without bank accounts or formal financial documents, receipts or tickets from Pil are the best and often only way that the farmers can prove their income. CIDRE’s loan officers told me that these tickets, which show how many liters of milk a farmer sells to Pil each month, are critical to the evaluation of each borrower’s eligibility for a loan. Depending on their income and other assets, most farmers are also required to put up some or all of their cows as collateral for the loan. Thus, for every new client, loan officers have to make the rounds at the cow pasture, snapping photos of each animal to ensure that CIDRE can tell them all apart.

Kiva Coordinator Diego Cardona documents collateral for a client's loan

With access to a loan, CIDRE’s clients are able to buy more food for their cows or invest in new animals, both of which can be leveraged into higher milk production and an increase in income. According to Diego, CIDRE has found that farmers who are able to acquire 10-12 cows or more are most likely to increase their income, while those with fewer tend to make just enough money to sustain themselves and their business. By tapping into the funding made available by Kiva lenders, CIDRE will be able to extend their reach even further into Cochabamba’s dairy farming community.

: Typical terrain behind the home of a CIDRE client (and sheep, whose wool is sold for extra income)

I hope you’ll join me in welcoming CIDRE to the Kiva community. Their first set of loans should be up on the site soon, so keep an eye out for those cows!