Last weekend, I had the chance to attend Asociación Arariwa´s year end planning retreat out in the Sacred Valley in Urubamba, Peru. More than just spending the weekend having fun with my co-workers at the institution, I was excited to finally see what a microfinance institution (MFI) really is about. On one hand as a Kiva Fellow, I get a very in depth look at how my MFI works, but on the other hand, Kiva is still perceived as a funding source for the MFI so they are constantly “putting their best foot forward”. Arariwa´s 2011 strategic planning retreat was a way for me to see, internally, what microfinance meant to this MFI in Cuzco.
The retreat started out with pictures of Machu Picchu, Maras Moray, Sacsayhuaman, and the mountains and sweeping valleys that put Peru on the map for every tourist coming to South America. The executive director began, “This is our rich history, memories from a time were we were the most advanced race on the face of the planet”. The discourse went on to show poverty in Peru: families standing outside of adobe shacks, and homes destroyed by the floods last February and the executive director explained that their “rich” history can´t guarantee a “rich” future for the poor in Peru. How only microfinance coupled with education (at every village bank Arariwa provides training sessions for their clients) and a focus on improving health and nutrition can do that.
Another point he made was on the subject of interest rates saying that “Some would be critical of how we are trying to reach the poor, but what we gain is not only reinvested in our clients, but allows us to reach those that are more poverty stricken and more isolated”. He also mentioned that having the same interest rate in Cuzco (where it is less expensive for Arariwa to serve their clients) as the countryside allows the cross subsidization of their loan products and encourages them to reach more people. Normally, you hear stuff like this from the public faces of microfinance, but hearing the executive director of a large MFI in Peru say the same things in his strategic planning meeting encouraged me that the focus of microfinance, at least for Arariwa is still the alleviation of poverty.
My own participation on the retreat commenced in the form of a skit where Arariwa´s Kiva team played out how to properly treat a client.
And it wouldn´t have been a proper retreat without singing Peruvian folk music around a bonfire at 2am.
Eric Burdullis is a Kiva Fellow serving with Arariwa in Cuzco, Peru. When he isn´t fending off machete attacks outside the city or chasing rats out of his kitchen, he is visiting borrowers or hanging out with the Arariwa team in the city.