Jan 28, 2020

Micro loans fuel dreams of female entrepreneurs in Oaxaca, Mexico

Oaxacan weaver Guillermina Carreno Gutierrez, 85

It's Thanksgiving Day, 2019, and while most Americans are sitting town to turkey dinners, a dozen visitors to the city of Oaxaca in Southwestern Mexico are piling into a van for the 45-minute ride to the Zapotec village of Teotitl├ín del Valle. There awaits a lunch of tortillas filled with black beans, cheese and chicken; bowls of a fragrant green vegetable soup and chilled glasses of tamarind water.

We've happily traded away a holiday traditionally spent with family and friends to join a "microfinance tour" of rural villages sponsored by Foundation En Via. The non-profit funnels  the $50 each us paid for the meal and transportation into interest-free loans for self-employed female entrepreneurs. They weave rugs, raise sheep and make tortillas in rural communities where houses made of mud bricks and dirt roads contrast with the stylish cafes, hotels and boutiques in Oaxaca's tourist hub.

Microfinance lending is common in many underdeveloped parts of the world. What sets En Via's programs apart is that all the borrowers are women, based on the principal that women are the ones most likely to invest in their families and their communities.

“It’s not necessarily about fighting poverty as much as its about empowerment," En Via staffer Kendall Hitch told us. “Women (in these villages) historically have had very, very limited access to financial institutions."

En Via, started in 2010 by an Oaxacan and an American, changes up the game by lending to women in groups of three, using a "solidarity model" that requires women to support each other it comes to following through on required classes, goals and loan repayments. 

Borrowers must complete money and business management classes before receiving their first loan. As they move through the process they attend monthly classes on developing a small business, and finally present their businesses to a group of responsible tourists. That's where we come in.

En Via funds around 80 percent of its loans from the tours it offers, with another 20 percent coming from donations. The aim of its tours is to show travelers a different side of Mexico, while giving the women experience in presenting their products and business plans as they were pitching to bankers or investors.

Maria Sosa Luis and her daughter, Marcela,
cook tortillas on an outdoor comal

Our first stop is at the home of Maria Sosa Luis where she and her daughter, Marcela, have set up the large, communal table in front of an alter adorned with religious statues and pictures. She and Marcela cook tortillas on an outdoor grill while we start with a soup made with fresh greens, squash and herbs. Next to the cooking area are two sewing machines. Hanging nearby are beautiful woven rugs and jewelry, most with price tags, a tip they picked up in an En Via training class. Maria's goal (everyone in the program has one) is to start a small restaurant outside her home.

Loans start small, and can grow. The first - 1,500 pesos or the equivalent of $80 U.S. dollars   - must be paid back in 10-15 weeks. Subsequent loans can go as high as 7,000 pesos ($375). Only one in 100 defaults.

Maria Lazo Bautista grinding cochineal

Our next stop is the house of Maria Lazo Bautista who explains that as a child, she helped her mother wash wool, and began weaving when she was 15. She uses natural dyes made from plants, seeds and insects, demonstrating how she produces a bright red dye by pulverizinng dried cochineal, bugs that attach themselves to the pads of prickly pear cacti, then adding lime and salt to produce different shades. For now, she sells her textiles out of her home, but her goal is to open a shop. 

Yarn colored with natural dyes
Next door we meet another weaver. Adelaida Ruiz Carreno and her mother, Guillermina Carreno Gutierrez, 85. Skanes of colored yarn hang from a hook over looms in a mud brick work area. Adelaida, on her second En Via loan, says the training classes taught her how to calculate a profit and how to invest in her business to make it grow. She sells out of her home and at the village market on Sundays, but knows that if she had a shop with regular hours, she could sell more and more often.  As we're leaving, she goes to a tree to pick the pomegranates, (she uses the seeds for dyes) and gives us a few to take with us.

Adelaida Ruiz Carreno
We end the day at the home and farm of Isabel Lopez Mendez in San Sebasti├ín Abasolo, an agricultural village where horse carts bump along the dirt streets. Isabel grows oats, garlic, runs a tortilla business in her garage and raises sheep. Before En Via, she had a bank loan, but it carried a 30 percent interest rate. 

A smiling Isabel Lopez Mendez

"The En Via loan is small, but I have more money now, and don’t have to think about paying back the interest. It helps," she tells us. She wants to use her next loan to buy a bull. In the meantime, she's learned how to make a savings plan, and recently took a class in customer service. There, she says, she learned the importance of smiling and engaging the people who come to buy her sheep.

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