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Local student gets education in realities of microlending
Posted by Kristi Heim
Brett Mennella, a senior at Bellevue High School (at right), helped start the school's Microfinance Club, which focuses on learning about the global effect of microcredit. The club raised more than $130,000 in the last two years to support microloans, and decided to invest the money in Esperanza International, a global microfinance institution based in Bellevue founded by former Mariners catcher David Valle. This is the first of several posts he'll be filing from the Dominican Republic, where he is doing volunteer work.
Despite its growing economy, the Dominican Republic is only a tourist destination for most of the Western world. It has 1,288 kilometers of coastline, much of which is made up of brilliant sandy beaches and resorts. However, more than 30 percent of the country lives below the poverty line of $2,326 in annual income according to USAID, and a majority of the others are not too far above it. I have been in the Dominican Republic two weeks now and most of what I have seen is far from the lucrative tourist lifestyle.
I spent my first week with the Bellevue High School Microfinance Club. We have loaned to over 1,400 people to date in the San Pedro area through Esperanza and were able to visit many of these people during our stay. We also worked on a school in a very small town outside of San Pedro for two days, which is not easy to say the least in 95 degree heat with 75 percent humidity.
I am currently staying with a host family in the town of Hato Mayor, home to about 100,000 people, which is a very populated area relative to the rest of the country. It thrives around the town park, the center of social interaction, and the various Christian churches located throughout the town. The poverty of the Dominican Republic is apparent in the deteriorating streets and undeveloped buildings.
The public water system often shuts off for days, even weeks at a time. Despite this, there is relatively easy access to water and almost all homes have big rainwater collectors on their roofs which they then chlorinate and can use for household activities.
There is a large supermarket in town and dozens of other "colmados," which sell a variety of food from fresh fruit and bread to soap and cleaning supplies.
These are the realities of Dominican life that I have been able to experience during my stay here.
This morning I visited an Esperanza microcredit bank meeting in Bejucal, a small, poor community about 45 minutes outside of Hato Mayor. I rode there in a "Gua Gua," the Dominican term for a van or bus. This one normally seats 12 people, but the driver had somehow managed to pack 24 of us into the vehicle.
All bank meetings start at nine in the morning and associates are required to attend these biweekly meetings to make their payments. In this particular meeting, some associates did not show up so they sent their payment money with others in the same bank.
Attendance is very important in the world of microcredit because its solidarity is based on ideals that all people in the group should support each other and are accountable for each other. Their absence was a problem that is a constant focus in microlending because it does not encourage the trust and responsibility needed for a microcredit bank to be successful.
I interviewed a man named Juan Sosa, who was the main connection between the Esperanza officials and the bank. He buys and sells cacao, a plant native to the tropical Americans and Caribbean, and is currently paying back his ninth and largest loan thus far with Esperanza, about $425. He is married and has two daughters, ages two and nine, and two sons, ages three and eight. He plans to take out another loan after he has paid this one back in order to continue developing his business. His goal is to buy a cement house because the one he is currently living in is wooden, making it susceptible to hurricanes which plague the region annually.
However, this is not the norm for microfinance or for the Dominican Republic. Many people are only able to make minor, subtle changes to their life, but they are at least able to do so thanks to microfinance and other philanthropic causes. They might put a cement floor in their house when they have been sleeping on dirt all their lives. Or maybe they can start buying meat when their diet normally only consists of rice and plantains.
Poverty here is not only rooted in the low income that people take home each year. The education, health care, transportation and other government systems are all underdeveloped and do not seem to be improving anytime soon.
From what I have seen so far, this seems to be a classic case of "the rich getting richer and the poor getting poorer."
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