The loan officer’s story
“Our job is about more than just giving out loans. We get involved in the women’s business, family, goals, and dreams.”
This is a loan officer speaking.
Actually, loan officer is not entirely correct. Within Fundación Paraguaya, there are basically two job positions responsible for the contact with the client. There is the Oficial de Crédito; the loan officer responsible for individual loans, and there is the Asesora de Comités; the loan officer responsible for women’s solidarity groups (“comités”). In solidarity groups, borrowers usually receive individual loans, but they are organized into groups whereby group members are jointly liable for each other’s loans.
In this case, it was an Asesora speaking.
On Thursday, July 23, I had the privilege to accompany two Asesoras on their daily client visits. I have not asked their permission to disclose their names, so let’s call them Gabi and Esther!
It was a rainy day – just like the many we have in the Netherlands. Interestingly enough, the people here seem to be less used to it, and so become less productive. The incredibly complicated and unpredictable bus system also didn’t help, so we spent a great part of the day waiting for the bus (“el Colectivo”). This was not necessarily a bad thing, as it gave me plenty of time to ask lots of questions about their work and Paraguayan culture in general.
1. A woman with experience
Esther currently has 42 groups in her portfolio of 15-17 women each, which means approximately 650 women (!). With her five years on the job, she is considered very experienced. She likes her job because she can spend 80% of her time outside the office and has freedom in creating her own schedule.
The solidarity groups at Fundación Paraguaya are exclusively for women, probably because they generally have a better credit risk in microfinance than men (Despallier and Guerin, 2010) and more readily join groups and spend time in group meetings (Armendariz and Morduch, 2005). Much evidence has also shown that social pressure is more effective among women than among men.
Women vs. Machos
Because of the macho culture in Paraguay, the Asesoras have to be women as well in order for the group members to feel comfortable in sharing experiences, asking questions and simply being themselves during meetings. Some believe the macho culture stems from the Triple Alliance war (1864-1870) in which Paraguay was fighting Brazil, Argentina and Uruguay at the same time, losing approximately 70% of the male population and hence giving men a wild card to repopulate and save Paraguay from extinction, in other words promoting polygamy.
How does the macho culture translate into ordinary life? When Esther was growing up, her grandmother did not want her to go outside to the ‘cancha’ where everyone was playing because “girls are supposed to stay inside.” Her younger brothers were allowed to do anything though. The brothers were also not used to doing the dishes or cleaning up after themselves. This was a woman’s task and was done by Esther’s older sister. But Esther had her own opinion and refused to participate in this. She also did not follow her family’s advice to get married right after college and start a family. She is an independent woman who goes her own way.
Esther doesn’t want to stay an employee forever and at some point would like to start her own business. This is not the first time young Paraguayans shared this ambition with me. Does this (partly) explain why only a few of the loan officers seem to be older than 30?
Sorry, I’m getting off track. Back to the story.
Within the solidarity groups, there may be suppressed housewives and victims of domestic violence without the freedom to pursue their own goals and dreams. That is why it’s very important to have a female loan officer managing the relation.
2. New kid on the block
Gabi is the other Asesora I joined on this day. She is very curious by nature. Her mother was a client of the Fundación, and when she had to join her one day to visit a branch, she wanted to know what people were doing there. She asked a million questions and got more and more interested. When she met someone during her studies that worked at the Fundación and told her a position was opening up, she applied immediately. She first started as an assistant and later as a receptionist, which is an important position in the credit process because the receptionist has to explain what clients are signing for, prior to receiving the requested loan. Three months ago she got promoted to Asesora. Gabi is the new kid on the block. And she is a huge AC/DC fan.
How to find new clients
Her portfolio is not impressive yet. She manages three groups of women at the moment and is responsible for growing her own client base. That is why she goes out in the field a couple of times a week, to explore new neighborhoods where potential clients might be situated. She does this by simply taking a bus to an area of Asunción with which she’s unfamiliar and looking outside the window for communities with several dispensas (little supermarkets), shops that sell second-hand clothes, etc. Basically, she’s looking for anyone with a small business that could be a potential client for Fundación Paraguaya. The tricky thing is that convincing one person to become a client is not enough. She needs at least 15! These need to be from the same community as well, or else the element of social pressure doesn’t work. In addition, the women should be the ones forming their group, not the Asesora. Therefore, what Gabi is trying to do is to get a few women in a certain community enthusiastic, women who will then hopefully bring in others they know and trust to the group. Not an easy job!
Next week I’ll talk a bit more about the interaction I have seen between the Asesoras and the clients.
To be continued…
Dennis van Erp is working out of Asunción, Paraguay, where he’s collaborating with Accion partner Fundación Paraguaya on developing a business plan for their microlending program.