Why is Microfinance Important in Azerbaijan?

Yelena Shuster, K11, Azerbaijan

Greetings from Azerbaijan!

It’s been almost two weeks since my arrival. Not surprisingly, my impressions are multifarious. I enjoy the good and blast the bad, all the while trying to understand this country and its contradictions. On the one side is the growing economy, with multiple natural resources, on the other are the many people who do not get to bask in Azerbaijan’s growing wealth. While expensive stores line the streets that lead to the beautiful boardwalk along the Caspian sea, where young chick Azerbaijanis eat ice cream as they stroll with friends, bleak Soviet-style apartment buildings emanating poverty and struggle are just a kilometer or two away.

The other day I met an ex-Peace Corps volunteer who noted that in the town where he worked in northern Azerbaijan, the cold winters were frequently spent without heating. The irony is that gas is one of Azerbaijan’s most prominent resources and it was being sold abroad rather then provided to Azerbaijan’s citizens for use during the cold winters!

I have learned not to judge the state of the common people based on the government or politics, or on how the elite of a country flaunt their wealth. The real people are those individuals whom you may never see on television or read about in the news. And this is what I love about volunteering with Kiva… I get to meet real people!

One of the biggest Kiva challenges in Azerbaijan is encouraging lenders to lend to borrowers here. Either because of preconceived notions about what poverty is or mere disinterest in the region, borrowers here have a lot of trouble getting Kiva funds.

So why should you lend to a borrower in Azerbaijan?

Because without credit these individuals cannot improve their lot in life. Opportunities here are limited by corruption and lack of credit. In a post-communist developing economy like Azerbaijan’s, self-sufficiency is important. By helping Azerbaijanis expand their businesses, lenders also create opportunities for whole communities! By supporting a farmer who wants to buy more seeds or fertilizer we are helping his neighbors buy local and inexpensive food! By supporting a female hair stylist we are helping the network of local women and improving their self-esteem! And think about the children! As a borrower’s business becomes more financially prudent, children of borrowers can pursue their own interests like music lessons, sports and university education instead of being limited by subsistence activities.

Here’s a picture of a Kiva borrower with his calf. Aftandil’s other cows were out grazing and enjoying themselves on the pasture not far from his home. Free range, hormone-free, local yogurt? I saw it with my own eyes. Plus, Aftandil provides the local stores with fresh yogurt. He says that neighbors love his dairy products so much that they sometimes come to his house to purchase them. He’s seeking a loan to buy another cow because he’d like to dedicate himself to his cows full time and quit his part-time job as a construction worker. His loan request will be online later this week, meanwhile check out one of the other borrowers (many of whose loans are expiring in a day or two).

Çox sağ olun!
(thank you)

Entry Filed under: Azerbaijan,KF11 (Kiva Fellows 11th Class),Komak Credit Union.

Yelena Shuster is currently working as a Kiva Fellow with Komak Credit Union in Azerbaijan.

Yelena's story was originally posted on "Kiva Stories from the Field" on May 30, 2010. Please click here to see the original post.