In Colombia, a microcredit project aims to re-awaken community solidarity

This article appeared in the April-June 1996 issue of One Country.


A program that has granted small loans to more than a thousand rural farmers is unique for its emphasis on training which seeks to promote cooperation and a sense of service to the community at large.

LA ARROBLEDA, Cauca, Colombia - Nine years ago, Nubia Viafara's house was a simple one-room affair - just a small bedroom, really. The cooking, socializing, and day-to-day living were done mostly outdoors.


Nubia Viafara stands in front of her house, which she has expanded from a single room to a four, with the help of micro loans provided by FUNDAEC.

Today, the 47-year-old farm woman is the owner of a pleasant four-room house (with an indoor kitchen), a couple of dairy cows, and some chickens. She has also been able to pay for her children to attend high school.

The boost in her fortunes, she said, has come principally from the small loans - and the training - she has received since 1987 through an innovative microenterprise program run here by FUNDAEC , a social and economic development foundation based in nearby Cali.

"It's been a very, very important help," Ms. Viafara said of the program, which has over the years loaned to her a total of $4,000 - money that she is proud to say has all been paid back. "I've been able to improve my house, which was very small, and make it bigger. And my daughters have been able to study in high school."

Equally significant, Ms. Viafara added, has been the impact of the program's distinctive emphasis on learning to work together as a community. In order to receive credit, FUNDAEC requires that potential loan recipients go through a technical training program that includes a heavy accent on moral education - which itself focuses on concepts of community service and cooperation.

"The values training has awakened in us a sense of solidarity, of knowing that one is not working alone," said Ms. Viafara. "We knew that we had these values, but they were sleeping."

Others who have received training from FUNDAEC agree, saying that the sense of community solidarity that the program reinforces has in many ways helped as much or more than the financial credit.


Gilmo Viafara has purchased two dairy cows, as well as a number of chickens, with the help of credit provided by FUNDAEC. He is shown at left in his chicken house. He is 65 and has been associated with the project for 7 years.

In this respect, the FUNDAEC approach appears to be unique among microenterprise programs. Although similar in some respects to such better-known programs as the Grameen Bank, FINCA and ACCION, FUNDAEC is distinctive for its promotion of community cooperation and service as essential components, said Barbara Rodey, a microenterprise specialist who is currently a full-time consultant for Terra Christa Communications, a North American-based NGO that promotes sustainable development.

"FUNDAEC promotes an explicit focus on human values that is unique among microenterprise programs," said Ms. Rodey, who has studied such programs all over the world. "Courses in solidarity, unity, responsibility, conflict resolution, the purpose of man, consultation, honesty and service are prerequisites to the receipt of credit and solidarity group membership.

"While FUNDAEC based its methodology on Grameen Bank, and Grameen promotes '16 Decisions' that include spiritual and practical commitments of its members, FUNDAEC found through experience that actual training in values wrought the most important result of the program: unity.

"With a highly developed sense of unity, community groups transcend the mundane pettiness that sabotages collaborative action," said Ms. Rodey. "Working together they find a place of solidarity and belonging within the group that motivates participation and the capacity to achieve far more than each could do separately."

Solidarity Groups


Members of solidarity groups in LaArrobleda, Cauca, include, left to right, Jair Sarasti, Ludvia Viafara,Emilse Viafara, Nubia Viafara, José Arbey Mina, Manaem Lucumi, and Gilmo Viafara.

Development specialists like Ms. Rodey say that microenterprise programs are increasingly viewed by development agencies as among the most powerful tools in the overall effort to end poverty worldwide. To promote such programs, a coalition of international NGOs, UN Agencies and donor agencies are planning a Microenterprise Summit, scheduled to be held in Washington, D.C. next February.

The main element of microenterprise programs lies in their willingness to make tiny loans to impoverished farmers and small businesspeople who, lacking any traditional collateral or security for a commercial loan, would otherwise be refused commercial credit.

Since it was started in 1989, the FUNDAEC program has turned over an initial fund of about $400,000, which was received as a loan from the Inter-American Development Bank, three times, lending out some 900 million pesos to more than 1,000 individuals. The average size of each loan has been about $600.

Like the Grameen Bank, FUNDAEC organizes potential borrowers into "solidarity groups" - small bands of three to five people who collectively pledge to repay such loans as may be granted to any among them. Over the last seven years, some 250 solidarity groups have been formed.

"The traditional credit system requires a material guarantee, in the form of a down payment or some other form of collateral," explained Pascal Molineaux, a French-born development specialist with FUNDAEC. "The camposinos don't have any such security to start with, so instead of a material guarantee, we have created a social guarantee. None of them will receive a second allotment of credit until they have repaid the first loan. And that creates a social guarantee in that they have to help each other out so that their projects are successful."

In addition to joining a solidarity group, FUNDAEC also requires that potential loan recipients receive technical training - such as how to manage a dairy cow, raise better poultry, or grow more diverse and productive crops.

Potential loan recipients must also receive "solidarity" training - training which focuses on how better to cooperate and work together as a community. Indeed, FUNDAEC requires that solidarity training be done first, even before applicants choose which type of technical training they wish to receive.

"The purpose of the training is to increase social cohesiveness, which is the key to the program's success," said Edgar Zapata, who coordinates the program for FUNDAEC. "And the training really influences the groups a great deal."

According to Gustavo Correa, FUNDAEC's director, one purpose of the values training is to help bring back the sense of community solidarity that existed among the farmers in rural Colombia before big sugar cane and coffee companies came in and bought up much of their land. Although initially thrilled with the cash, many of the farmers in the region near Cali have since found that they must now work harvesting cane or picking coffee - instead of managing their own farms - to make ends meet.

"Solidarity has always been a value that was present in rural communities," said Dr. Correa. He explained, for example, that farmers in the past helped each other build their homes, coming together for a day or two as an entire community to work together. Such a traditional gathering was called a "minga" - the men would clear land and lay bricks; the women would cook meals and carry water.

But this cooperative spirit largely died out in the face of industrialization and the rise of large commercial agricultural ventures, Dr. Correa said, as farmers sold their land and then ended up working it again for day wages.

FUNDAEC, which sees itself as principally dedicated to the "research and application of scientific knowledge," has sought to rediscover those values which were most important in the past and to combine them with new insights into how to stimulate cooperation.

"To us, the concept of solidarity is a spiritual concept," said Dr. Correa. "From relationships based on love and unity come material well-being and material prosperity - not the other way around."

Many of the farmers who participate in the program see it the same way.



Emilse Viafara, for example, a 40-year-old cousin to Ms. Viafara, has been involved in the training program for seven years, all without applying for credit. "I participate in all of the meetings, but I want to wait a little while longer before borrowing money," he said.

Mr. Viafara said, however, that he finds that the values training has greatly increased the overall sense of solidarity and cohesiveness within the entire community of farmers in La Arrobleda. "Before we were like grains of sand spread out," said Mr. Viafara. "There was no feeling of solidarity. Everyone had to do things on his own. For example, to build a house, one had to do it himself.

"Now, through the training that we've received and the meetings we've been having, there is a much greater integration," Mr. Viafara continued. "We've come to know each other, become friends. Now the whole community comes together. So one is not only in the program for credit, though the credit is very important. But through the program one learns to share, one learns to manage money, one learns to be responsible."

Mr. Viafara's cousin, Nubia, agreed, saying that the traditional practice of having a "minga" has been restored in their community.

Extending the Benefits

Another distinctive and perhaps unique aspect of FUNDAEC's program is the degree to which it seeks to extend the benefits of credit to the entire community. FUNDAEC requires that one percent of each loan be set aside in a special social fund, to be used in projects that are of service to the entire community.

For the purpose of managing these funds - as well as handling the other administrative tasks that go along with providing microcredit - the solidarity groups are organized into slightly larger groups, known as "nucleos." Each "nucleus" - to use the English term - is composed of from 4 to 10 groups; within the nucleus officers are elected; these officers, in turn, act as local "loan officers" for the program, deciding which loan requests should be granted, dealing with disputes, defaults, or other problems, and managing the one percent social fund.

All together, the FUNDAEC program now works with 12 nuclei, all located in the two departments (the Colombian equivalent of a state or provincial government) nearest to Cali: Valle and Cauca.

Some of the projects which have been financed by the social funds managed by various nuclei include: the reconstruction of a public school building in Tinajas; payments to help increase the salary of a local teacher in Crucero de Gauli; the creation of a community garden in La Balsa to help train local students in new agricultural techniques; the purchase of land for a community center in La Arrobleda.

"This is where FUNDAEC is really different from other microenterprise programs," said Ms. Rodey. "It not only focuses on helping the individual to realize his or her full capacity, but also in helping the whole community to realize its capacity for working together. And this capacity is, of course, far greater than the sum total of all of the individuals working separately."

In La Arrobleda, the solidarity nucleus also used money from the social fund to help rebuild the home of a woman after a fire had destroyed most of it. In fact, said Mrs. Viafara, the community came together in a traditional "minga" to do this. All of this, even though the woman whose house had burned was not a member of the nucleus.

"When one learns something one wants to apply it," said Ms. Viafara. "We had been trained in the importance of solidarity. And we saw the need for it. Her house was really badly damaged. So we said, 'Let's go and help her.' She didn't have help from anybody else."

 

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