By Pro Mujer on partners.wsj.com/metlife/multipliers
Ten years ago, Maria Guerrero Vargas’ business consisted of little more than a shoe catalogue and a high dose of determination. Every day, the mother of two would rise at 4 a.m. to get her own household in order—cooking, cleaning, taking her daughters to school—before starting work at her shoe-selling business. While the children were at school, if Maria wasn’t knocking on doors hoping to make a shoe sale, she was washing and ironing clothes to scrape together little more than $20 a week.
A decade later, Maria stands tall in her fully stocked shoe store in the heart of town, though not unaffected by memories of the difficult road that led her there. When her now ex-husband left the family, Maria was suddenly in debt, owing months of unpaid school bills, and alone to care after her two daughters.
Fifty-nine percent of women in Latin America work in the informal sector. Like the majority of them, Maria didn’t have access to traditional forms of banking, let alone loans. She lived from day to day, setting her earnings aside one day only to spend them the next.
In 2007, a friend invited Maria to join Pro Mujer, a women’s development organization headquartered in New York City that provides financial services and business training, among other services, to over 250,000 low-income women in Argentina, Bolivia, Mexico, Nicaragua and Peru.
Maria approached Pro Mujer with dreams of building her nascent shoe enterprise into a business that could support the family to escape that endless cycle of scarcity. Through Pro Mujer’s financial services and capacity-building programs, Maria has learned to spend what she borrows wisely and to maintain and increase her credit.
Within a year of taking out her first loan of $175, the very same shoe store from which she operates today started to prosper. Maria was able not only to invest in new and better merchandise, but also to set money aside in a savings account for the first time.
When clients first come to Pro Mujer, they join a communal association, a group of approximately 20 women who guarantee one another’s loans. Together, members learn the value of financial responsibility and solidarity and are therefore less likely to default on their loans. Maria currently holds a $2,340 loan. Last year, Maria was also approved for an Individual Loan within the Communal Bank (ILCB), which means that she is able to request an additional $2,000 to grow her business.
“Six years ago, we had approximately 1,900 pairs of shoes in the store. Today, we have over 5,000,” Maria states proudly.The ILCB methodology was rolled out in Mexico in 2015 with the support of MetLife Foundation. It offers clients like Maria, who have a good payment record with Pro Mujer, an additional capital infusion for their business without their fellow group members having to guarantee it and take on additional risk. The borrower, however, is still able to continue meeting with and receiving the support of their communal association. Additionally, she can repay the loan as soon as funds are available, as opposed to having to wait for all group members to repay.
Nearly 10 years after taking out her first loan, Maria is still sowing the seeds of financial empowerment. Her older daughter, Daisy Lizethe, 28, is a law school graduate with a family of her own, a partner in her mother’s shoe business, and also a Pro Mujer client. Gisela, 17, is well on her way to graduating from high school and joining Pro Mujer too, with plans to get a Pro Mujer loan of her own to invest in the family business.
Maria’s vision for the future includes opening—and staffing—a second shoe store with Pro Mujer’s support. She’s come a long way from her days selling door to door from a catalogue. “This [ILCB] loan has helped me grow my business. But most importantly, it’s allowed my two daughters and me to move forward,” Maria says.
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