Tuesday, December 16, 2008

Feliz Navidad

To my english speaking friends: Sorry about the one language only text, but I'm really in a hurry and spanish comes out naturally and faster in this kind of situations (the kind of situation where you need to leave on 20 minutes or your flight will abandon you!!!).

Buen dia amigos de Para Mexico. Estoy a punto de apagar mi computadora para viajar Guadalajara y Puerto Vallarta como hago cada Diciembre para compartir estas fechas de Navidad y Año Nuevo con familiares y amigos.Pero antes de irme, quiero desearles a todos ustedes unas felices Fiestas Decembrinas y un gran comienzo de año.

Nuestro equipo es joven todavia, pero no ha dejado de crecer constantemente dia con dia desde su fundacion. El total en prestamos en este momento es de $3,925.00. Con esa cantidad, 123 personas alrededor del mundo han sido beneficiadas con su generosidad. El numero de miembros, que las primeras semanas fuimos unos cuantos, ha crecido hasta 63, convirtiendo a Para Mexico en el grupo 60 en cuanto a numero de integrantes.

Este año ha sido dificil por los problemas economicos de nuestros paises, y 2009 no parece que vaya a ser mejor. Sin embargo, el grupo no ha dejado de invertir en Kiva y en sus emprendedores. Sin duda estamos convencidos de que la mejor forma de aliviar un poco la pobreza es dando una oportunidad a cada emprendedor para que por medio de su propio esfuerzo pueda conseguir una vida mejor para si mismo y sus familia.

Que nos espera el proximo año para el equipo? Al comenzar la primavera de 2009, espero organizar el primer "loan-a-thon" del equipo, como lo han hecho exitosamente otros grupos, y para motivar una alta participacion, regalar algunos articulos de la tienda de Kiva, tal vez un par de gorras y alguna camisa que seran rifados entre los que hayan participado en el citado "loan-a-thon". Tambien en Octubre, me gustaria organizar el segundo "M + M Challenge", pero ahora que nuestro grupo es mas grande, con una cantidad mayor. Cualquier otra idea para incrementar el impacto del equipo es bienvenida, este grupo es de todos nosotros.

Finalmente, cuando estemos compartiendo con nuestra familia estas fiestas decembrinas, tomemos un momento para reflexionar en aquellos que han sido menos afortunados que nosotros, y que estamos tratando de ayudar un poco.

M + M

Wednesday, December 10, 2008

Kiva's New Repayment System

I know there is concern among not only team members, but the whole Kiva community about the total absense of payments for a good three months or so. We kind of knew that big changes were going on regarding the installation of a new billing system, and here are some answers on Kiva's official blog. The good news is that starting December 15, payments should be flowing to our accounts again. I'm reproducing the text for your convenience:

Kiva recently made the transition to a new partner administration system. The new system allows our partners greater flexibility in reporting and is aimed at increasing transparency, giving more accurate data, revising our billing process to better reflect realities on the ground, and adding some financial protection to Kiva by only giving our lenders repayments that Kiva has actually received.

What does this mean for your Kiva account?

Since we closed out one billing system and are opening up another, you shouldn't expect to see any repayments into your Kiva account until the new billing system kicks in on November 15th. Some loans that were posted in the new system will need an extra month to catch up and won't see any repayments until the next billing cycle begins on December 15th.

How does Kiva's new repayment system work?

Kiva's repayment system is designed to accurately reflect the way that our Field Partners collect funds from the entrepreneurs that you've supported with loans.

When one of Kiva's Field Partners uploads an entrepreneur's loan request to Kiva, they set the anticipated repayment dates for the loan and the date that the loan is set to be disbursed to the entrepreneur. This repayment schedule can be monthly, quarterly, once at the end of the loan term, or whatever most accurately reflects the way that the entrepreneur will be making repayments.

Our Field Partners have until the end of the month that each anticipated repayment is collected to let Kiva know whether or not they actually collected the repayment. Once we have all of this information, we use it to generate a bill to charge our Field Partners for all of the repayments they collected that month.

To speed things up and to minimize the number of wire transfers being sent overseas, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for entrepreneurs on Kiva.

If the balance is positive, that means that the Field Partner has raised more than they need to repay, and we use those funds to credit your lender account with the repayments due to you.

If the balance is negative, then the Field Partner has 30 days to send us a payment for the balance. As soon as we receive that payment, we use those funds to credit your lender account with the repayments due to you.

Once the repayment is made into your Kiva account, you can re-lend the funds, donate them to Kiva's operating expenses, purchase a gift certificate or withdraw them into a PayPal account.

Why are all repayment due dates on the 15th of the month?

When one of Kiva's Field Partners uploads a loan request to Kiva, they provide Kiva with a schedule of repayments that they anticipate the entrepreneur will make. At the end of every month, Kiva requires that our Field Partners indicate whether or not they've collected these repayments from the entrepreneur. They have a 15 day grace period after the end of the month to do so.

After this 15 day grace period, we bill our partners for all of the repayments that they indicate they've collected. Our Field Partners then have an additional 30 days to make a payment to Kiva so that we can deposit the repayments into your Kiva account. The repayment due date reflects the last day the Field Partner can pay before the repayment becomes delinquent.

For example, if a Field Partner posts a loan with the first repayment on January 10th, we ask them to indicate whether or not they've received this repayment by January 31st.

On Feburary 15th, at the end of the grace period, we generate a bill to the Field Partner for all of these repayments.

The Field Partner then has until March 15th to pay this bill before we mark the payment on Kiva as delinquent.

Sunday, December 7, 2008

RSS and Kiva

A brief description of RSS and how to used it is posted next. Make sure to use this tool in order to receive up to date information about Mexican entrepreneurs seeking loans on Kiva. I'm currently using Thunderbird 2.0 to receive Kiva's RSS feeds into my mailbox, just like regular emails, and this blog is using RSS too: on the right side of this blog, immediately after Kiva Links, new information about Mexican entrepreneurs is posted as they are published in Kiva.

What is RSS Feed?

Given the vast number of Web pages and content providers on the Internet, RSS technology allows you to identify the content that interests you most and have it delivered directly to your desktop. Thousands of sites have developed feeds and you can view them all, regardless of source, using any feed reader. The most popular and descriptive definition of RSS is "Really Simple Syndication." You can think of a Web site's feed as a text broadcast of the site's content. Once you subscribe to a feed, you'll always have the latest headlines because your RSS reader periodically retrieves the most recent feed additions.

Where can I get an RSS reader?

There are many kinds of readers, from stand-alone applications to Web-based services, to those built into a Web browser. You will either need to download and install an application or install an RSS-ready browser on your computer. Follow the instructions provided on the Web sites listed below to install or configure your reader. Most of the applications are free and easy to use. Some of the more popular RSS readers:

The following Web browsers have built-in feed readers

Mozilla Firefox (Windows, Mac, Linux)
Opera (Windows, Mac, Linux)
Internet Explorer 7.0 (Windows)
Safari (Mac)

E-mail Programs
The following e-mail programs have built-in feed readers

Mozilla Thunderbird (Windows, Mac, Linux)
Outlook 2007 (Windows)
IntraVnews (Windows, plug-in for Microsoft Outlook)
R|Mail (Web-based service that sends feeds to any email account)

Web-Based Services
All of these services are free, and will work with any recent Web browser. All require registration and show ads as you read your feeds.

My Yahoo
Google Reader

Desktop Applications
These programs run on your computer, and will check feeds automatically whenever they're running. Those marked with a "$" are commercial software; the others are available for free.

Omea Reader (Windows)
SharpReader (Windows)
FeedDemon (Windows, $)
NewzCrawler (Windows, $)
NetNewsWire Lite (Mac)
NetNewsWire (Mac, $)

There is no need to install new software on your computer, you are most likely using a browser than can read RSS feeds right now.

How does Kiva uses RSS?

Kiva does provide RSS feeds. These feeds can easily be used to instantly deliver information about entrepreneurs into a RSS reader.

Currently, two field partners operate in Mexico, each one of them have a web page on Kiva that provides a RSS feed. All that you need to do is either click on the RSS orange button under the section "Kiva Fundraising Status"on the right side of the page; or provide the RSS address of each field partner to your chosen RSS reader. The web pages of these field partners and their corresponding RSS addresses are:

Fundacion Realidad.
RSS feed:

Fundacion para la Vivienda Progresiva
RSS feed:

Monday, December 1, 2008

November Stats

In November, the amount loaned and team's membership kept growing at a steady pace. The growth was not as explosive as October though, but considering the current economic situation, it was outstanding.

We have 14 new members who joined during November: George, Adalberto, Anonymous from Richland Center, WI; Sandra, Maya, Tinne, Hollito, Henry W. Moore School, Cozumel, Cesar, Priscilla, the Ysaguirre Family, Edie and Tamara. Welcome to "Para Mexico".

The first member from outside the North American continent joined the team during November, Hollito from Germany.

The total amount loaned by team members grew by 28% this month. Our team is ranked 87 on Kiva's community, with a total of 118 loans funded, at a average of exactly two loans per member.

Most of our loans are still going to Mexican entrepreneurs, with a good amount going to Latin American, a few more to Africa and Asia, and just one going to Eastern Europe and Oceania.

I cannot insist enough on using RSS to receive information about loans to Mexican entrepreneurs instantly. Those loans are becoming more scarce everytime and this is a good tool to receive a notification as soon as one is available. If you have any question about setting it up, please let me know!

I'm thinking about volunteering for the Kiva Translation Program, but with two little energy-packed girls at home it may be difficult to find more time to sit down and translate a few loan profiles. I'm sure it may be interesting, I'll post about that later.

M + M

Tuesday, November 25, 2008

Friday, November 21, 2008

Five more ways to increase the Team's impact.

Five more ways to increase the Team's impact.

6) Use RSS to pump information about Kiva loans into your email software, browser or news reader. The feed addresses for Field Partners operating in Mexico are:

· Fundacion para la Vivienda Progressiva

· Fundacion Realidad

7) Take advantage of social networks such as Facebook or MySpace to promote Kiva and the team “Para Mexico”. Particular actions you can take are:

· Install Facebook’s Causes application on your profile and then set Kiva as one of your favorites Causes

· OR install Facebook’s Kiva application (this is a different tool from the Cause application explained before). This application will show on your Facebook profile what entrepreneurs you have invested in.

. OR become a fan of Kiva's Facebook page.

· Every time you complete a loan on Kiva, you will see a small Facebook icon on the final “Thanks” screen when the transaction is confirmed. Press this icon and a news feed will be published so all your friends on Facebook can be notified that you just invested on a Kiva entrepreneur.

· Kiva on MySpace:

8) Add a link on your personal blog to the team’s pages:

9) Purchase a Kiva gift certificate for birthdays and incoming Holidays. That would make a great gift.

10) This coming Holiday season, while you partake with family and friends, take a moment to reflect on those less fortunate than us, and remember we are trying to help one microloan at a time.

Sunday, November 16, 2008

The Ugly Side of Microlending (Part 5 of 5)

Reproduced from an article in Business Week, December 13, 2007.

Full article http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm


Last year, in a brash move characteristic of Grupo Salinas, lawyers for Azteca went to court rather than comply with a new law requiring banks to inform clients of the total financing costs they are charged. Azteca sought a type of protective order with which individuals or companies can shield themselves from application of a particular law or other government action. A federal judge granted the exception.

Freed of disclosure requirements, Azteca continues stressing weekly payments rather than long-term interest rates. When pressed for its average annual rate, Azteca asserts that it is about 55%. But Chuck Waterfield, a consultant based in Lancaster, Pa., who specializes in financial modeling for micro-lenders, points out that if Azteca's average rate is translated to make it comparable with APRs in the U.S., it comes to 110%. That's because Azteca charges interest on the full amount borrowed throughout the life of the loan, even as the principal declines—not on the declining balance, as is common in the U.S. An adjunct professor at Columbia University's School of International and Public Affairs, Waterfield has no relationship with Azteca.

When Azteca loans go bad, the results can be bruising for borrowers. Porfirio Soriano Pérez and his son Zalatiel bought a $1,435 Chinese-made motorcycle last year on an 18-month plan that required $29 weekly payments. They intended to use the bike to scout out customers for the parsley they grow on several acres just outside San Martín Texmelucan. The Sorianos knew the 68% financing would boost the motorcycle's total cost to $2,289, but they lacked cash to pay up front.

In February, disaster hit. A hailstorm wiped out their crop and with it their $350 monthly income. "Suddenly," says Porfirio, "we had nothing to sell, and no money." They fell behind on payments. Soon a collection agent began showing up at the extended Soriano family's unpainted home. In October, Azteca delivered written warning of legal action. "The problem is that people go into the store and buy out of pure emotion," says Morales, chief of Azteca's local legal department.

The Sorianos already had paid $1,560 on the motorcycle—more than the original sticker price—and owed about $700 more, but ended up returning the purchase. That erased the debt in Porfirio's name. The company will resell the bike and recover the money it's owed. The Sorianos, meanwhile, have nothing left to plant a new crop.

Monday, November 10, 2008

Five ways to increase the Team's impact.

In no particular order:

1) Invite family and friends to join Kiva and Para Mexico.

2) Reloan funds entrepreneurs pay back to you to other entrepreneurs.

3) The way teams are ranked on Kiva is by number of loans, not total loaned. Therefore it is better to loan $100 dollars to four entrepreneurs than making one single loan of $100, so the team’s total of loans increases by four, not by one.

4) Encourage your fellow team members to keep loaning by formulating challenges or posting messages on the team’s blog or Kiva’s Para Mexico page.

5) Be generous!! Remember you are helping out people around the world rise from poverty by helping themselves.

Can you think of something else ?

Wednesday, November 5, 2008

Yes, we did !!

Monday, November 3, 2008

October Stats

What a month October was. A month of explosive growth in members and amount loaned. Honestly, when this group started, I wasn't expecting this success. I thought a new member would join every once in a while, and new loans would be sporadic. How wrong I was. Take a look at this graphs:

Most of the team members reside in the USA, followed by Mexico, Canada, and three members that didn't disclose their location. And by the way, we have two mysterious Anonymous lenders.

The team is fulfilling its goal, which is funding entrepreneurs in Mexico, although there are plenty of loans to entreprenours around the world.

From $225.00 loaned in September to $2750.00 this month, that's a 1222.22% Increase (More than one THOUSAND percent)

Thank you everibody for your efforts.

Monday, October 27, 2008

The Ugly Side of Microlending (Part 4 of 5)

Reproduced from an article in Business Week, December 13, 2007.
Full article http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm
The money isn't spewed out carelessly. With efficiency unusual in the Mexican marketplace, the bank deploys a cavalry of credit and collection agents on motorbikes. These jefes de crédito y cobranza visit borrowers within 24 hours of a purchase or loan application.

Juan Carlos Pérez Lopanzi, a 25-year-old college graduate who studied international commerce, serves as one of 13 credit agents in San Martín Texmelucan. One October morning, he rumbles up to the home of Maria Teresa Hernández as neighbors peer from their windows. Hernández, a 50-year-old street vendor, wants to borrow $460 for a new hot dog wagon. She isn't home, so Lopanzi questions her adult daughter about the family's finances. Do they rent or own? Have they lived there at least two years? What do they spend on food?

With each answer, Lopanzi taps the screen of a handheld computer. Data will be routed to Azteca's operations center in Mexico City. The state-of-the-art system keeps the cost of processing 7 million transactions a day to a mere 3 cents per transaction, according to Azteca. "It's amazing—all this is for poor people," says Juan Arévalo Carranza, the bank's technology chief.

Back in dusty San Martín Texmelucan, Azteca's proprietary software alerts the agent, Lopanzi, that Hernández, who earns $276 a month, doesn't qualify for a $460 loan. He offers $370 instead. That will require $10.60 weekly payments for 12 months for an APR of 85%. Hernández will end up paying $551. "If she had more income, she could have a shorter payback period, and the interest rate would be lower," the agent explains to the daughter. She shrugs, then nods in acceptance.

"Tell her she can go by the store this afternoon for her check," Lopanzi says, as he registers the serial numbers of the daughter's stereo, DVD player, TV, and refrigerator. The items' resale value, preprogrammed into Lopanzi's digital device, must add up to around double the value of the loan. If the woman fails to pay, Azteca will cart away the daughter's possessions and sell them in a Grupo Elektra used-goods store.

Azteca deducts the depreciated value of seized goods from outstanding loan balances, so if someone who doesn't pay has enough possessions to cover the debt, the bank considers it paid. Azteca bars such customers from borrowing again but doesn't count them as having defaulted, which helps explain its stated loan failure rate of just 1%. Banks serving more prosperous clients average a 5.3% default rate on consumer loans.

Mexican lenders benefit from attitudes cultivated in a society lacking a welfare safety net, personal bankruptcy system, or meaningful consumer protection laws. Credit bureaus have recently sprung up in Mexico, including one that Elektra helped start in 2005, and many among the working poor worry about sullying their new credit ratings. They assume that, one way or the other, they or their relatives will just have to pay back whatever they borrow, says Gustavo A. Del Angel, an economic historian who studies micro-finance at the Center of Research & Economic Teaching in Mexico City.

Borrowers who fall behind realistically fear public embarrassment. Photocopies of debtors' national identification cards sometimes turn up on telephone poles and at central marketplaces with warnings that say "DON'T LEND TO THIS PERSON!" Six months ago, an Azteca agent in San Martín Texmelucan posted such flyers. The company fired him. "Our system is not intended to be publicly shaming," says Niño de Rivera, Azteca's vice-chairman, but he acknowledges it "is intended to exercise peer pressure."

Even as Mexico's economy modernizes, companies operate with minimal oversight from government. Luis Pazos, head of Condusef, Mexico's regulator of consumer financial transactions, says his agency logs complaints about Azteca's collection methods and the adequacy of its disclosure of credit terms. "We've talked with that bank about the bad manners they've had," he says. But Condusef hasn't taken any substantial action against Azteca, which says it scrupulously polices the behavior of its employees.

Monday, October 20, 2008

Adela y elias's Challenge

Adela y elias have a new challenge for the team: Lifting "Para Mexico" to the top five pages of Kiva's teams.

It is going to take a good effort to fulfill this goal, so don't forget to invite friends and family to join "Para Mexico". Our team currently sits on the top ten pages, and I believe it can go a lot further than that.

Happy lending.

Sunday, October 19, 2008

The Ugly Side of Microlending (Part 3 of 5)

Reproduced from an article in Business Week, December 13, 2007.
Full article http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm

says Pedro Morales, head of the bank's local legal department. "They take on financial commitments they can't meet." But Niño de Rivera, the bank's vice-chairman, says: "There is no pressure to sign loans, and consumers are encouraged to shop around freely for what best suits their needs."

The Aranas used the $1,315 to buy picture frames, toys, and inexpensive cosmetics, which they displayed in their front room, beneath a dangling lightbulb illuminating a portrait of the Virgin of Guadalupe. Once again, their business faltered. Two textile factories in the area had closed recently, throwing thousands out of work. Mexico offers no government benefits to cushion such adversity. The Aranas saw few customers.

For six months they made their payments, but then, in July, Adrián lost his soft-drink delivery job. By September, past-due notices and interest charges were piling up, and an Azteca collection agent was visiting regularly. "We either eat or we pay off the loan," says Adrián. The despairing family resorted to borrowing $200 from a loan shark at 10% a month. Informal lending of this sort, despite its attendant threat of violence, is not prohibited in Mexico. Azteca's local collections chief, Alejandro Tejeda, says it's a shame that borrowers can land in such trouble. "But these people made a commitment, and they need to live up to it," he says.

With no money to pay the loan shark or Azteca, and fearing that the bank will seize their few belongings, the Aranas are trying to sell their house. So far they haven't found a buyer, and if they do, it's not clear where they would live. They're keeping food on the table, barely, with Adrián's door-to-door sales of tomatoes and herbs, which he transports in the basket of a large tricycle. "We never thought this would happen," he says. "We're sinking fast."

Banco Azteca and Grupo Elektra are key parts of Grupo Salinas, an amalgam of media, telecommunications, and retail businesses controlled by billionaire Ricardo B. Salinas Pliego. A maverick among Mexico's business elite, he has sparked controversy. In 2006 he settled civil fraud allegations by the U.S. Securities & Exchange Commission concerning the finances of his TV network, then traded on the New York Stock Exchange. He denied wrongdoing but paid $7.5 million and was barred for five years from serving as an executive or director of companies listed in the U.S.

The Salinas family began selling furniture on credit more than a century ago in the northern city of Monterrey. Ricardo, 51, says he learned early in life that those who work in Mexico's informal economy, without pay stubs or much collateral, and who can't afford sofas or blenders outright, will snap up merchandise if offered seemingly manageable terms. "If you want to become rich, sell to the poor," he recalls his grandfather instructing him.

He learned to get even richer by lending to the poor, and to those who are better off. Azteca targets 14.5 million Mexican families earning $5,100 to $33,600 a year. Mexico has a total population of 109 million, with a median annual household income of $7,297. Mainstream Mexican banks cater to the wealthier elite, while less than one-third of working-poor families have access to any banking services at all.

Azteca has absorbed Elektra's ethos of high-pressure employee quotas and incentives. Elektra clerks, clothed in the store's signature bright yellow, earn commissions on top of their standard weekly salary of $120 for tacking on extras such as warranties, life insurance, and even long-distance bus tickets. The biggest score comes from persuading a customer to spread payments over the longest possible period, 104 weeks. "Sell on credit and earn much more money!" an online company training manual states.


The strategy has far exceeded the expectations of Grupo Elektra executives. The bank already contributes one-fifth of its parent's $5 billion in annual revenue. It boasts a consumer loan portfolio of $2 billion and a healthy 22.3% return on shareholder equity.

The main Elektra/Azteca branch in San Martín Texmelucan aims to meet a daily target of $9,000 in fresh loans.

Sunday, October 12, 2008

The Ugly Side of Mircolending (part 2 of 5)

Reproduced from an article in Business Week, December 13, 2007.
Full article http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm

But it creates tempting hazards as well, which in Mexico are drawing many unsophisticated families into a maze of debts. Pawnshops and loan sharks, whose interest rates of up to 300% have plagued generations of Mexicans, now face rivals offering terms that are less harsh. But along the road to previously unavailable financing, some Mexicans are stumbling badly.

The Arana family is but a blip on one of the wide screens at Azteca's operations center. Beneath the digital glimmer lies a story of striving. Adrián Arana Sánchez, his wife, Francisca, and their extended family take whatever work they can find, adding a few pesos here and there. Last July, Adrián lost an $80-a-week job delivering soft drinks to stores in gritty, exhaust-choked San Martín Texmelucan, a city of 143,000 two hours southeast of Mexico City. He now brings home half that amount peddling vegetables door to door and making plaster-cast statuettes of Jesus. Francisca sells crunchy slices of jicama root outside an elementary school. With four children, two grandchildren, and a son-in-law, they live in a four-room cinderblock house in the shadow of snow-capped volcanoes once revered by the Aztecs.

Although indigent by U.S. or Western European standards, the Aranas see themselves as aspiring consumers and even as entrepreneurs in a society that makes all manner of goods and services available for what seem like manageable weekly payments. Banco Azteca plays a central role in that emerging credit economy. Started five years ago, it operates from the nearly 800 locations of its parent, Grupo Elektra, Latin America's largest electronics and home appliance chain. Elektra/Azteca has the sort of ubiquitous presence that Wal-Mart enjoys in the U.S.


The dazzling yellow facades of Elektra/Azteca outlets shout for attention in rundown neighborhoods. Inside the store across from the Catholic cathedral in San Martín Texmelucan, a tag on a six-speaker sound system throbbing with ranchero music carries a price of $691, but larger bold print stresses weekly payments of only $16. An installment plan can be arranged by Azteca staffers who work from metal desks at the back. Over 18 months, the weekly payments nearly double the price, to $1,248. That's an APR of 88%. APR is commonly used in the U.S. to compare total loan costs. In Mexico, Azteca isn't legally obliged to disclose it—and doesn't. (Mexican loans include a 15% tax on financial services.)

Adrián Arana, 50 years old and with a sixth-grade education, has become a regular customer at this branch of Elektra/Azteca. He and Francisca, who completed only the second grade, have obtained a series of small loans over the past four years to purchase a CD player, bicycle, TV, video camera, and bedroom furniture. In 2006 they took the next step, borrowing $920 to pursue a long-cherished ambition: opening a dry-goods store in the front room of their house. They saw the store as a means to achieve stability, and maybe a middle-class life. But like many tiny businesses started by inexperienced proprietors, this one soon failed. A neighbor had just opened a similar but better-stocked home shop. The Aranas toiled diligently at their other jobs to pay back the loan, missing some weekly payments and incurring late fees. With an APR of 105%, the loan ended up costing about $1,485 over a year. But they paid it off.

Determined to try again, they were back at Azteca in February with a new plan, this time to start a gift shop. Azteca granted them a bigger loan, for $1,380 over 18 months, but deducted $65 up front, leaving the Aranas with $1,315 and an APR of 90%. They say they didn't understand these terms. They focused instead on the weekly payment of only $32. "They never tell you what the interest rate is," says Adrián. "They say, Sign here,' but they don't give you time to read everything."

Some Azteca executives concede that borrowers sometimes walk away confused. "Terms are explained to them, maybe not as clearly as they should be, but many clients don't understand,"

Friday, October 10, 2008


We made it, the challenge is completed. Thanks to you entrepreneurs around the world can aspire to a better life for themselves and their families. I know this are scary economic times, for team members back in Mexico, the peso is sliding everyday against the dollar, and for member here in the United States, the stock market is terrible and we don't know where this crisis is going to end up. Nevertheless we should be proud of ourselves that regardless of tough economic times, we are still willing to give a helping hand to those less fortunate than us.

Thank you everybody for your efforts, here is the final tally of the challenge for team members:

Nuri $50
Amalio $150
Ron & Linda $50
adelas y elias $50
Ximena $50
Jim&Conchita Burmeister $25
Cody $25
Ricardo $50
Jana $50
Pier $25

The total is $525, a little bit more than the challenge.

M + M match for today:

Day summary:
Challenge $500.00
Team Loans $500.00
M + M Match $500.00
Left to match $0.00

Left to fulfill $0.00

Again, congratulations to everyone, it has been a great experience, and I hope to repeat the challenge on October next year.

M + M (Maya & Miriam, my two beloved girls say thanks also)

Thursday, October 9, 2008

M + M Challenge, summary for Thursday, October 9

A very slow day today, so slow, that there was only one loan today, from myself, just enough to make my match current with the team's total.

Team Total for today $0

M + M Match

Total match for today $25

Day 4 Summary
Challenge $500.00
Team Loans $425.00
M + M Match $425.00
Left to match $0.00


It's only $75 to complete the challenge. Let's do it team, we can make this happen !

Wednesday, October 8, 2008

M + M Challenge, summary for Wednesday, October 8

Getting closer to fulfilling the challenge, the following teammates contributed today:

* adelas y elias $25
* Ximena $50

Total for today $75

M + M Match

Total match for today $75

Challenge $500.00
Team Loans $425.00
M + M Match $400.00
Left to match $25.00

Only $75 for the team to complete the challenge, we are almost there. Three more loans tomorrow... and success !!!!

Thanks a lot, and the challenge continues tomorrow.

American Express Members Project

If you happen to have an American Express card, all you have to do is vote.

Tuesday, October 7, 2008

M + M Challenge, summary for Tuesday, October 7

Phew !!! Another frenzy of loans from the team this evening. It is really hard to keep up, Kiva doesn't provide a lot of tools to track what loans have been funded on a particular day, so I ended up checking every single loan to see which one had been done today. This is the list I came up with, let me know if I missed something:

* Amalio $100
* Jim&Conchita Burmeister $25
* Cody $25

Total for today $150

M + M Match:

Total match for today $200

Challenge $500.00
Team Loans $350.00
M + M Match $325.00
Left to match $25.00

Only $150 and the challenge is complete. Thanks a lot everyone !
The challenge continues, and maybe ends, tomorrow.

Monday, October 6, 2008

M + M Challenge, summary for Monday, October 6

Day summary:

What a day this was. I believe the M + M Challenge will be a success, and it may even be fulfilled before Sunday. I was kind of hoping that nobody will participate in the challenge, so I could have an excuse to get a long coveted Sony PlayStation II. But seems like you have decided that this money is better being invested alleviating poverty than on an exciting cool new piece of gaming hardware (so long FIFA 09!!!). Oh well, maybe Santa Claus will get me a surprise on December...

Here is a summary

Team members that loaned today:
* Ron & Linda $25
* Nuri $25
* adelas y elias $25
* Ricardo $50
* Jana $50
* Pier $25

Total for today: $200

M + M match:

Total: $125
Left to match: $75

Hopefully tomorrow there will be enough loans to Mexican entrepreneurs to match the total amount loaned by the team.

Thank you everybody. The challenge continues tomorrow.

M + M Challenge

M + M Challenge !!!

Good day friends of “Para Mexico”. I haven’t made a formal welcome to you’ all to this fine Kiva lending team. The team has grown with new members almost every day, and the lending total has grown too. We have members from all over the North American continent; form Regina, Saskatchewan, Canada, to New Orleans, Louisiana, United States to Melaque and San Miguel de Allende, Mexico. Some of you are Kiva veterans, others just joined. I hope your social lending goals are fulfilled in Kiva and you find the support you need by having joined “Para Mexico”.

And what is the M + M challenge you may ask?

I’m outraged; OUTRAGED after having read the article I posted in the blog about the state of micro lending in Mexico. Those lending companies are stealing and abusing people with loans that must be repaid with interest rates from over 60%, all the way to 100%. That’s not a typo, that’s ONE HUNDRED PERCENT!!!!

Lots of people with hopes to establish micro business and have a better life for themselves and their families will apply for loans at this shark corporations (Banco Azteca, Elektra, Banco Compartamos, among others), only to find that when they are unable to make a payment, they can lose nearly everything they own.

Enter the M + M challenge. I just got a $500 bonus from my company. I’m willing to socially invest that amount in Kiva. But here is the catch; I’m investing that money by matching the amount that you, my fellow team members, lend on Kiva. That is, if any of you invest $25, I will invest another $25, not necessarily to the same loan. Invest $100 as a team; I put another $100 on the table. All the way until my $500 runs out. It doesn’t sound as much, but at least we can take some business out of those shark corporation.

You can lend to whoever entrepreneur you choose to, but I’ll try to lend my match to a Mexican entrepreneur. And by the way, the challenge begins today, but ends on Sunday October 12. One week.

Send me an email to cc "at" cesarcastro "dot" com as soon as you complete a loan, so I can login to Kiva and match the amount.

OK, the challenge is on, happy lending !

Sunday, October 5, 2008

The Ugly Side of Mircolending (part 1 of 5)

Reproduced from an article in Business Week, December 13, 2007.
Full article http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm
In a gleaming office tower in Mexico City secured with retinal scanners, bulletproof glass, and armed guards, dozens of workers in white lab coats dart around a large operations center monitoring long rows of computers. Along one wall, 54 enormous screens flicker dizzyingly with numbers, graphs, and fever charts: a relentless stream of data. You'd think the urgent mission involved tracking the trajectory of a spacecraft or the workings of a national power grid, not tiny amounts of cash and credit for Mexico's working poor.

The transactions are so minuscule they hardly seem worth the bother. The average loan amounts to $257. But for Banco Azteca, a swiftly growing bank affiliated with Latin America's largest household retailer, the small sums represent a torrent of revenue that has caught even its founders by surprise. For three decades, micro-lending was seen as a tool of nonprofit economic development. Now poor people are turning into one of the world's least likely sources of untapped profit, primarily because they will pay interest rates most Americans would consider outrageous, if not usurious.

With no legal limits on interest levels and little government oversight, for-profit banks in Mexico impose annual interest rates on poor borrowers that typically range from 50% to 120%. That compares with a worldwide average of 31% among nonprofit micro-lending institutions, and the 22% to 29% that Americans with bad credit histories incur on credit-card debt. Azteca's business model succeeds not only because it can charge credit-starved clients almost whatever it wants. Equally important is that low-income Mexicans anxious about maintaining their reputation tend to pay back what they owe, regardless of the hardship. Those who slip behind receive frequent visits from motorcycle-riding collection agents. Default rates are infinitesimal. "We lend to them as much as they can borrow," says Azteca Vice-Chairman Luis Niño de Rivera, "and they can borrow as much as they can pay."


In a Mexico that is modernizing economically even as most people still struggle to make ends meet, Azteca has discovered an improbable market for financial services. Much larger companies based in the U.S. and Europe also have picked up the whiff of profits. Wal-Mart Stores, which obtained a Mexican banking license a year ago, began offering loans for purchases at 16 of its 997 Mexican outlets in November. In the U.S., the retailer markets itself as a friend to the budget-conscious. In Mexico, it charges interest rates that might set off popular and political revolts back home, although Wal-Mart describes its terms as appropriate to the Mexican market. At one store west of Mexico City, a 32-inch LG plasma TV with a price tag of $957 can ultimately cost as much as $1,474, thanks to a 52-week payment plan that carries an annual percentage rate (APR) of 86%.

Banamex, Mexico's second-largest bank and a wholly owned unit of Citigroup, is stepping up its pitches of personal loans to the working poor in 127 cities where it operates shops called Crédito Familiar, or Family Credit. HSBC Holdings last year bought a 20% stake in Financiera Independencia, a high-interest consumer lender that went public on Nov. 1. The Swiss insurer Zurich Financial Services is underwriting term life insurance policies that are sold along with small loans in Mexico. And homegrown nonprofit Compartamos morphed into a full-fledged commercial bank last year; it went public in April, reaping hundreds of millions of dollars for investors. All are examples of how financial players worldwide are pursuing profits by putting loans within reach of deprived borrowers.

Wednesday, October 1, 2008

Team Stats / Estadisticas del Equipo

I'm going to try posting this info at the end of each month. Just a couple of graphics showing who in the group is making loans and where those loans are going. The graphics are a little silly now, but I guess that at time goes by they will be more informative.


Voy a tratar de publicar esta información al final de cada mes. Son unas gráficas mostrando quién esta haciendo microcreditos y a que paises. Las graficas se ven muy simples, pero conforme pase el tiempo creo que se verán mas interesantes.

Azucena is the Champion for the month of September. She participated in four loans in one single weekend.

Azucena es la campeona del mes de Septiembre. Cuatro prestamos en un solo fin de semana.

México es el país al que mas prestamos se han otorgado, seguido de Perú, Honduras y Tajikistan.

México is the country with the most loans, followed by Peru, Honduras and Tajikistan

Tuesday, September 30, 2008

Lorena Ochoa en Prattville, Alabama

Prattville no está lejos de donde vivo, y cuando un amigo consiguió un par de boletos para ir al Navistar LPGA Classic de Alabama, no me la pensé dos veces, pues la campeona del mundo, Lorena Ochoa, iba a pelear por ganar un torneo importante desde Mayo pasado.

Ahora, no soy un experto en golf, ni lo practico frecuentemente, pero las mejores jugadoras del mundo iban a estar presentes. El torneo habia empezado desde el jueves pasado, y hoy seria el dia final, con Lorena Ochoa en primer lugar con 13 golpes bajo par, empatada con Louise Friberg.

La salida de Lorena fue aproximadamente a las 12:30 y despues de casi 5 horas de competencia, finalmente se llevó el titulo. Al finalizar el hoyo 18, habia triple empate en primer lugar, con Lorena Ochoa, Candie Kung y Cristie Kerr empatadas con 15 golpes bajo par.

Para desempatar la competencia, las tres jugadoras repitieron el hoyo 18, que contaba 411 yardas, par-4. Kerr hizo boogie y quedo eliminada, y Ochoa y Kung, al hacer el par, repitieron una vez mas el 18.

Kung tuvo que hacer put tres veces al segundo desempate, mientras Lorena solo dos, para llevarse el titulo por un solo golpe.

Ahora, Lorena estuvo solo a centimetros de perder la competencia, pues en el primer desempate Kung estuvo a un par de centimetros de que entrara la pelota en el primer put. Al final saco la experiencia y se gano un buen premio de $210,000.

Fueron casi seis horas de seguir a Lorena por los 18 hoyos, y que tenía que ser con gran rapidez por cierto, pues si perdiamos el paso nos arriesgabamos en perdernos la acción mas adelante. Traté de sacar una buena cantidad de fotos, pero el campo estaba lleno de nazis que inmediatamente te señalaban con el dedo y gritaban "no pictures". Clandestinamente pude sacar las fotos que pude.

Al final del torneo nos teniamos que llevar el autografo de Lorena, y despues de esperar pacientemente por casi dos horas, finalmente pudimos lograr el preciado souvenir. Cansados, con hambre, asoleados y deshidratados, pero fue una gran satisfaccion escuchar las frases "México" y "first place and world champion" en la misma frase. Gran campeona Lorena !!!

Vienen las pocas y mal tomadas fotos que pude sacar.

Lorena, porque siempre me das la espalda?

Lorena y su contrincante, Louise Friberg, de Suecia, empatadas al inicio en primer lugar. Louise caeria hasta el sexto lugar al final.

Lorena esperando su turno.

El momento del primer desempate. Cristie Kerr se puede observar a las derecha de Lorena lamentandose por ser eliminada.

El momento de la gloria, despues de un durisimo segundo desempate, sacando la bola triunfadora del hoyo. Kung a la izquierda con camisa rosa.

La premiación, donde Lorena agradeció a su familia, a los organizadores, a su caddie, y a unos cuantos mexicanos gritones que por ahi estabamos.

Después de finalizada la competencia, siguieron las entrevistas, y el momento critico en que ibamos a tener unos cuantos minutos para obtener nuestro preciado premio despues de un largo dia, el autógrafo de Lorena. Por cierto, esa reportera no esta de mal ver.

Como moscas a la miel, una avalancha de gente se le acercó a Lorena en cuanto acabó la entrevista. Es sorprendente que después del un dia agotador, Lorena todavia tuvo tiempo para atender a los aficionados con gran amabilidad y buena disposición. Aunque claro, despues de ganar doscientos mil dolares, creo que estaba contenta de firmar donde le pidieran.

Souvenir sin precio #1, tuve que pisotear dos niños y empujar a una anciana para conseguirlo, pero misión cumplida.

Souvenir sin precio #2, proximamente en Ebay!

Monday, September 22, 2008

First Team Loan / Primer prestamo del equipo

"Ivone is married and has two children: 10-year-old Jason and 4-year-old Jacqeline. Her husband is an employee. She began her business because Ivone wanted to help her husband in supporting the family. Three years ago she began selling American second-hand clothing, which has generated a good income. She requests a loan for $250 to be paid back in four months. The loan will be used to buy merchandise to make her business grow. With your help, Ivone will make it."


"Ivone es casada y tiene 2 hijos: Jasón de 10 años y Jacqueline de 4 años, su esposo es empleado. Ella inició el negocio por querer sacar adelante a su familia apoyando a su marido con la economía familiar. Empezó hace 3 años vendiendo ropa americana y le ha dejado buenos ingresos.
Ella necesita un préstamo por US $250 que pagara en 4 meses para comprar mercancía ya que quiere hacer crecer su negocio y con tu apoyo lo va a conseguir"


Monday, September 15, 2008

Para Mexico - Porque es importante ayudar.

En nuestro pais Mexico, existe una clase media que conforma cerca de dos quintas partes de la poblacion del pais, la cual puede proveer a sus familias de necesidades basicas como educacion, vivienda, entretenimiento; y por su puesto una minoria acomodada que controla las grandes corporaciones y la riqueza del pais. Perdida debajo de esa estructura social, existe la mayoria de la poblacion, cerca de la mitad del total del pais, la que vive en diferentes niveles de pobreza, y el 15% de la poblacion que se ubica en el umbral de la extrema pobreza, sobreviviendo con un dolar o menos al dia.

La erradicacion de la pobreza no es una tarea sencilla, hay varios factores que contribuyen a que una familia este sumida en la miseria sin posibilidades de salir adelante: Desempleo o subempleo, educacion defectuosa o no existente, falta de servicios medicos, e imposibilidad de tener acceso a servicios financieros.

Porque falta de acceso a servicios financieros? Sin poder obtener capital inicial de alguna institucion financiera, debido a falta de garantias, una persona pobre carece de la posibilidad de iniciar algun negocio, taller o comercio, o si consigue credito, es por medio de prestamos predatorios que ofrecen dinero con terminos de usura.

En 1983 se fundo el Grameen Bank en la ciudad de Dhaka, Bangladesh. El fundador del banco, Muhammad Yunus, se inspiro para fundar la institucion durante la hambruna en ese pais de 1974, en la que el personalmente dio 27 dolares a un grupo de 42 familias para que pudieran producir articulos sin tener que acudir a prestamos predatorios, con la condicion de que el dinero fuera devuelto. En 2007, Grammen Bank tenia 7 millones de miembros en Bangladesh, y ha otorgado 6.55 billones de dolares en creditos, con un 95% de taza cumplimiento de pagos. Los microcreditos han ayudado a millones de personas en Bangladesh, sobre todo mujeres, a salir de la pobreza extrema y poder aspirar a un futuro mejor. En 2006, Muhammad Yunus recibio el Premio Novel de la Paz por sus esfuerzos con Grammen Bank.

La experiencia de Grammen Bank ha demostrado que los microcreditos funcionan, y la idea se ha extendido alrededor del mundo. Finalmente es posible obtener el capital necesario para que una persona pobre pueda salir adelante. Pero no se trata de una caridad, el beneficiario del prestamo tiene que cumplir su obligacion financiera, conviertiendolo no solo en un empresario, si no en un ciudadadano responsable en su comunidad.