Headstand Media Bank of Hope Update
It has been a year since Headstand Media funded the Bank of Hope in the Dominican Republic (See post: Headstand Media Bank of Hope). We thought it would be appropriate and helpful to find out what has happened as a result of this micro-finance investment during the past year.
Before getting into more specifics, Hope International works through a local DR partner called Esperanza. Here is some information on how Esperanza’s activity in the DR has grown since beginning their partnership with Hope in 1995.
With this background in mind, I logged into our Esperanza partner portal at www.esperanza.org and downloaded several Excel spreadsheets of information: Clients Report, Disbursement History and Financial Summary. Here is what we learned about our investment in 2011.
During the past year, the Headstand Media Bank of Hope provided “Microcredito General” loans to 60 individuals consisting of 5 men (avg. age = 45) and 55 women (avg. age = 39), with an average of 1.5 dependents each. The 60 individuals were all members of local “grupos.” In 2011 our initial investment touched and affected approximately 150 individuals.
In 2011, 17 total loans were made through 14 Dominican loan officers at 7 branch locations: La Romana, Santiago, Seybo,Puerto Plata, Samana, Hato Mayor, San Pedro de Macoris. The total dispersements to these “grupos” were US$13,979.
Of these 17 loans, 4 have been paid back in full, and 13 are still active. The total repaid capital to date is US$9,363. The total amount still active is US$4,766. If all of the current loans are paid back in full (there have been 0 defaults to date), the bank will realize a US$150 profit from the loan activity. These funds are left in the bank and used to lend to more individuals within groups over a longer extended time period.
Carmen Vargas belongs to a community bank that calls itself “Women with Purpose,” and everything this mother of four does is filled with just that. She says her goal is to provide a better future for her family of six, and to make that possible she took out a small loan from Esperanza, for $150. With her loan, she purchased a used taxi, and although the car isn’t in perfect condition, she says it’s already making a big difference. In addition to the money Carmen earns on taxi fares, her husband earns more money in his shoe repair business as he can now transport more raw materials in a single trip. Carmen says she appreciates the encouragement she and her fellow community bank members receive at each meeting. “The economic benefits of being a part of a Bank of Hope are great,” she says. Carmen uses her taxi not only to provide for her family but also to benefit her community. She regularly transports others to and from their local church, and when emergencies arise, she also uses her taxi to transport her neighbors to the hospital or to get help.
As many as 40 percent of the clients served by Esperanza, HOPE’s partner in the DR, come from Haiti. Lingering discrimination, as well as language barriers, can prevent Haitians from finding decent employment and these immigrants are frequently marginalized or even taken advantage of. In some communities, called bateyes, companies seek low-wage laborers to harvest sugarcane. The vast majority of these workers are of Haitian descent, leading to higher concentrations of immigrants. The back-breaking labor generates little income—but Esperanza is serving clients in many of these communities. Small business loans and basic business training give many the opportunities they’ve been seeking.
One Esperanza loan officer named Alejandro, serves clients in a batey community. Though Haitians are not highly regarded by most Dominicans, Alejandro is studying Creole on his own time in the hopes of building more trust and establishing better rapport with the clients. Alejandro explains, “This helps to build a more complete relationship between the loan officer and the client because I can interact with them directly … and they can approach me in trust and confidence.”
Headstand Media is pleased to be associated with this energetic and growing organization in the DR. Even in these difficult economic times, we are so impressed with how our initial investment has been able to touch so many lives in the first year. We value our partnership with Hope International and Esperanza, and look forward to even more progress in providing opportunities for individuals and families to work themselves out of poverty in 2012.