Tag Archives: Banking

Very Cooperative

Winds of Peace Foundation has committed a great deal of time and resources to the study and development of cooperatives in Nicaragua.  Over the past five years alone, WPF has supported more than thirty coops; underwritten the cost of a half-dozen cooperative workshops for rural participants; commissioned studies about their history, makeup, the effects of climate upon them, and the context of coffee; and now partially sponsored an entire cooperative certificate program to continue teaching and to provide a tangible marker of achievement.  We’ve even pitched the idea for the creation of a “Synergy Center,” whereby WPF might partner with  a North American university to share its wealth of experiences and findings and provide a destination for students and delegations wanting to know more about the realities of Central American neighbors.

We’ve had some amazing successes.  We’ve also experienced some unexpected and disappointing defaults.  We’ve come to know a lot about Nicaraguan coops and what makes them work.  Yet, at the same time, we’ve had one organization- not even a cooperative in structure- that models the cooperative methodologies and successes as well or better than almost any other partner.  Yes, I’ve had another visit with ANIDES.

ANIDES has been guiding women of the rural communities of Matagalpa in the creation of small community banks in recent years, creating financial literacy, sustainability, independence and savings accounts for its participants.  The impact upon the lives of its members is palpable, not only in terms of financial strengthening, but also in quality of life and family.  WPF has admired the motivations and results of this group for years.  And now, ANIDES is proud to be reporting that these small community banks are becoming formally-registered cooperatives, with ten of the current thirteen banks in the registration process.  The objective is to eventually form a union of cooperatives once all registrations are complete.

These coops offer strengthened opportunities for their members to establish outlets for their small enterprises: crafts, bread-baking, small services and other commercial ventures.  These entrepreneurial efforts have created the financial wherewithal to “feed” the community banking enterprise.  The resources generated by these small enterprises often are used to fund significant events, such as the addition of indoor plumbing to a home, a water softener for cleaner drinking and washing water, or education opportunities for members’ children,  a dream that might otherwise seem very out-of-reach for these same families.

The legal cooperative status confers some technical advantages for the  women members: they will have access to joint banking accounts, easier accessibility to those accounts, greater security for deposits, cooperative education to further their understanding of collaborative advantages, opportunities to learn from one another.  The plan is to conduct monthly meetings among the cooperative delegates to consistently share experiences, problems, concerns, financial lessons and to celebrate what has been and promises to be a continuing success story in the rural countryside of Matagalpa.

The real value of these fledgling cooperatives, however, may not be in the technical or legal characteristics that registration will confer.  The bigger impact just may be on the lives and attitudes of those who have been willing to risk moving out of their comfort zones and into positions of learning and financial responsibility. For most, it’s an act of faith.  (By comparison, imagine yourself voluntarily signing up for a quantum physics class as a forty-something year-old, when you barely understand arithmetic.)  But such is their determination for improving their families’ circumstances, to work in some form of solidarity.  It also underscores a deepening sense of self-respect: in discussing a request for possible funding,  they have specified for the first time in our work together that the funding be in the form of a loan, to be fully repaid.  (I truly wish I could convey the sense of pride on the faces of the women as they specified a loan.)

They are taught and they understand the basic finances of their banks.  They assume positions of leadership, likely for the first time in their lives.  They make decisions among themselves.  They establish and attend meetings of their banks, sometimes walking for miles to be present.  They create celebrations of their work and themselves.  In short, these women do the things that successful cooperatives-  successful organizations of any sort- must do in order to endure.

As WPF imagines new ways of bringing together organizations to model best practices and to learn from one another, ANIDES might very well need to be part of the mix, even though they aren’t growing coffee, beans, rice or raising cattle.  What they are raising is their quality of life, their knowledge and their self-esteem, and being very cooperative about it….



Different Time Zones

For approximately eight months of the year, the U.S. and Nicaragua are in different time zones.  During the rest of the year, we’re in synch.  Nicaragua seems to prefer the “natural” order of the clock, whereas we in the North have always favored the annual tinkering with time.  The time zone difference, when it’s in effect, really has no impact on WPF or on me personally; I simply have to have it in mind while I’m there when calling home in the evening, or catching a plane to or fro.  But there does exist a difference of another sort, a sensitivity and appreciation of  time which does make a big difference, and I have experienced it now twice over the past several weeks.

In the course of our work, funds are periodically transferred from a bank here in the U.S. to whatever banks our partners have indicated to us in their project requests.  When a project has been approved for a disbursement, a wire transfer is executed to the recipient bank.  At some time after the transaction has been completed, the bank’s central office initiates a follow-up call to WPF for the purpose of verifying both the intent and the details of the transfer.  Only then can the wire be sent to the Nicaraguan bank for receipt.  Technically, that’s the point at which WPF can alert the partner that the funding is on its way.  The process works pretty well, most of the time.  But then, there’s the matter of time.

Several weeks ago, a transfer confirmation could not be made on a Friday afternoon because I used a telephone number which was unfamiliar to the bank.  Despite having all of the security codes and passwords and identifications in order, I was not identifiable.  In the time that it took to authorize the number, the bank was closed for the week and the transfer was delayed until the following Monday.   Two days for a U.S. banker only constitutes a weekend; for a Nicaraguan farmer, it could mean the difference between a crop and a loss.

Time, in the more recent case, had to do with the logistical process that most of our partners must follow in order to access the funds which have been sent.  The banks are primarily located in Managua, while most of our partners reside in the more remote sections of the country.  In order to claim the transferred funds, partners must (most likely) board a bus in the early morning hours, ride for hours (shoulder-to-shoulder with endless stops), wend their way through the city to the bank in question, present their identification documents, and then turn around to take the same trip again in reverse.  That is, if time allows.  By this time, the day may be quite late, indeed, and a traveler from the far north may require a night’s stay in the capitol city before the journey home.  All in all, one  or two days’ time is required for the relatively simple task of making a bank withdrawal.

That reality, as harsh as it is, does not suggest that banks in the U.S. have any  influence over the inconvenience; rural peasants just happen to live far away from centers of commerce.  However, in a transfer made this week, I encountered an ignorance of time which dramatically caught my attention.

After a full 24 hours had elapsed since the completion of a wire transfer, I received a message from the U.S. bank, seeking “more information” about the wire.  After a couple of “telephone tag” misses of each other, the bank rep and I finally connected.  He had some fairly straightforward questions needing clarification and our exchange probably lasted only five minutes.  But he opened the door to further conversation by asking whether I had any other concerns or questions to pose since we were on the line.

I seized the opportunity to express my concerns about delays in wire transfers, that his call indicated to me that the wire had not yet been sent , even though the wire confirmation had been completed the previous day.  Given the additional time requirement for sending and receiving transfers, I could easily envision our partner waiting at his bank for a transfer that had not arrived.  I attempted to paint a picture for the bank employee, of peasants interrupting their lives for a day or two just to access these funds.  I stressed the importance of funding to these very rural Nicaraguans, and how even a slight delay might affect their ability to successfully produce their crops.  I described the difficulty which a peasant would encounter if required to stay overnight in a major city without plans to do so.  I thought that I created a fair portrayal of the extreme inconvenience and/or discomfort that could be incurred through a wire transfer delay.  And I hoped for an empathetic understanding of the importance of timeliness.

What I received in return was something less than that.  Beyond a cursory, “uh-huh,” the value of a Nicarguan farmer’s time seemed to carry little importance to the administrator of bank protocol.  I didn’t even receive a promise for the matter to be checked out.  It seems as though our understanding and appreciation for the value of time is still filtered through a singularly North American filter, even in a so-called global economy.

We may never experience a delayed wire transfer ever again.  I may never have to call from the “forbidden” phone ever again (though cell phones have been known to go down).  Claimants may never be required to withstand the ignominy and embarrassment of arriving at a bank and claiming funds that do not yet exist.  But a pronounced lack of urgency, vision and empathy has underscored the vast differences that sometimes exist between our two time zones….


Banking On It

In light of the current status of banks and banking in the U.S. (wretched), I suppose the last institution with which I’d like to be affiliated is a bank.  Central banks and those deemed “too big to fail” contributed mightily to the near-collapse of the U.S. economy several years ago, and their persistent breaches of integrity place them firmly at the lowest end of the scale of trustworthiness.  It’s a bad place for banks to be, when they represent an institution that really should thrive on their customers’ trust.  (Just this week I was prompted to contact one well-known national bank to inquire about when they might be predisposed to distribute a small remainder of my parents’ estate, the bulk of which was settled months ago.  Oh yeah, they replied, we probably can release those funds now.  Hm.  Who knows how long they might have elected to hold onto the funds if I had not inquired.)

Last week, however, I had an entirely different experience with a banking operation in Nicaragua.  I visited again with The Nicaraguan Association for Sustainable Development (ANIDES) and its visionary leader, Gloria Elena Ordoñez Vargas.  This is an individual and an organization that understands what banking is supposed to be like, and it puts to shame most of the other organizations I know that go by the name “bank.”

Winds of Peace has funded ANIDES previously, in an effort to assist the organization with the establishment of five communal banks.  These are small, local banking offices to promote the economic and organizational autonomy of more than 200 women who live in extreme poverty in very rural locations.  Indeed, the offices more often than not are simply the homes of the local leaders.  But what these banks have been able to do, what they have represented for the women members is nothing short of remarkable.

With a very modest funding by Winds of Peace, in a little more than a year ANIDES has been able to establish a revolving credit fund for the 220+ members, establish two business groups to coordinate independent “home” businesses, provide training in the creation of a savings culture, nurture a positive capital growth in each of the small banks established, offer education and assistance to women victims of domestic violence, enhance the access to basic food needs and boost the local economies of the communities served.  This is banking in its most holistic form, integrating elements that are social, organizational, cultural, economic, human, spiritual and environmental in scope.  When was the last time your bank inquired about your social, human or spiritual needs?

What is even more remarkable about this initiative’s success is that it is being achieved with women members who have almost no previous economic experience or training.  Meeting with the women for the first time last September, I was struck by their shyness and humility, but also with their tenacity (many came from miles away on foot) and their outright success: only one of the small community banks was showing deficits by its neophyte members.  Members themselves were providing the tracking, the follow-up and the solidarity with one another to make sure that their borrowing was matched by their repayments.  In other words, the bank existed to facilitate both the needs and the strengths of its members, not to impose onerous conditions that would encourage failure.  What a novel concept for banking.  What an amazing impact on the lives of some very poor people.

The intended extension of this banking project is that the women, who now have softened some of their previous fears about borrowing money, might be encouraged to invest in the improvement of their rudimentary homes and living conditions, including the installation of ecological toilets (some of the best composting toilet are being introduced into the market, recent upgrades in the technology make it easier to consider the option). This amenity- sounding so essential to so many of us- has been considered an absolute luxury by many rural residents.  With the presence of the communal banks to accompany them, such an amenity now seems within reach, and along with it rises the self-esteem of the women who can provide it.  The existence of a small bank can allow these women to take control of their lives in ways they previously could not.

What can a bank do?  Merely channel the empowerment of its members, provide access to credit and tools for investment, facilitate education to recognize and respond to gender oppression, encourage healthy habitat conditions, grow self-esteem, foster economic autonomy and teach people how to take more control of their own lives.  In a world where the future for many banking institutions seems to include implosion, we could learn a great many lessons from these communal banks in Nicaragua.  It might even beg the question, “Who really is the more developed….?”