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ARGENTINA: Microcredit Schemes Run by Indigenous Women Reactivate Economy

Marcela Valente

ABRA PAMPA, Argentina, Jun 14 2006 (IPS) - The Puna plateau region in northeastern Argentina has become a showcase for community financial administration, run by women. They have small banks, manage investment and health loans, and are reactivating the economy, for the good of the entire community.

Through sound credit management, organised rural indigenous women in the Puna region have succeeded where government projects based on outright grants have failed: they have started successful, self-sustainable business projects.

The town of Abra Pampa, population 13,000 is considered the capital of the Puna region, a high, cold desert area of 35,500 square kilometres, located in the north and west of the province of Jujuy, 1,800 kilometres northwest of Buenos Aires.

In 1999, the Warmi Sayasjunqo (“perseverant women” in Quechua) Foundation assessed the conditions in 79 Kolla indigenous communities, dependent on subsistence farming and livestock herding, in the environs of Abra Pampa, many of them in the valleys and hills surrounding the Altiplano.

“We needed to improve the land, fence it to save the pasture for our own animals, buy breeding animals to improve our livestock, buy seeds, learn to grow vegetables and make greenhouses, and build hutches and pens to raise small animals, and we needed help to get the most out of our wool,” Florinda Condorí, a member of the foundation, told IPS.

Based on this assessment, the Avina Foundation, an international organisation that supports sustainable development projects in Latin America, provided a microcredit fund to be used in the area.

According to economist Raúl Lloveta, coordinator of the Avina Foundation in Jujuy, the women of Puna successfully met the challenge of setting up a network of community banks providing low-cost loans over a wide, sparsely populated area. And now their organisation is self-sustaining.

“The Warmi set up a system that is different to traditional small-loan banking, because they use the credits as an instrument to break the vicious circle of poverty, as well as to leverage production,” Lloveta, an expert on community economics and development, explained to IPS.

Members of the communities can apply for loans to boost production and make headway in markets, but also to buy antibiotics for a sick child. This type of loan ranges from one to 300 pesos (30 cents of a dollar to 100 dollars), payable in one to three months, for example.

The Warmi started by calling on communities to elect women delegates, who were provided with training. “The leaders must be women. Some families would not accept that, and sent men. But we told them that unless women were in charge, we couldn’t give them credit,” Condorí said.

For one year, the women received technical help in productive activities and training in financial management. After that, credit funds were assigned, with the amounts depending on each community’s needs and their ability to pay the money back.

To date some 2,500 loans have been made to about 3,000 families in the Puna region, according to Avina’s calculations. Each of the 79 communities in the region has its own “community bank,” coordinated by a “quipu” (a sort of treasury secretary, in Quechua) who administers the loans.

“Some rural communities with 20 members were allocated 1,500 pesos (500 dollars), and others with 180 members might have 6,500 pesos (2,200 dollars) to distribute,” Condorí explained. Some communities manage a loan fund of up to 50,000 pesos (16,000 dollars).

Today these communities handle one million pesos (333,000 dollars), a much greater sum than the initial capital, and their productivity conditions have improved even more than those of their urban-dwelling neighbours.

Condorí borrowed 5,000 pesos (1,600 dollars) to fence her 1,000 square metres of land. This was at the beginning of the project. “A roll of wire cost 45 pesos (15 dollars) and posts cost three pesos (one dollar) each. Now, because of increased demand, rolls of wire have gone up to 200 pesos, and posts are 12 pesos,” she said.

The price increases indicate that the economy has been reactivated. “Before, nobody bought anything because nobody had any money. Now people have money, and that’s why the prices have gone up,” the Warmi representative said. She has also borrowed money to improve her vegetable garden, buy seeds, obtain the use of a tractor, and buy breeding stock.

Llama wool has become more profitable. Each llama provides up to two kilos of wool per year. Store owners in Abra Pampa used to buy the wool for 10 cents of a dollar per kilo, even though it commanded nearly five dollars a kilo in Buenos Aires.

The Warmi opened its own store and paid more than its competitors. “We paid producers up to eight or 10 pesos (2.70 or 3.30 dollars) a kilo,” said Condorí. Lacking suppliers, the other store owners were forced to raise their prices, which have now stabilised at four pesos (1.30 dollars), more than ten times the former value.

The Foundation contacted shops in Buenos Aires and the provincial capital of Jujuy, who send their buyers to the Warmi store in Puna to purchase the typical woollen goods of the region: pullovers, ponchos, gloves, socks and bedspreads.

The women also take out loans to raise chinchillas, rabbits, chickens and trout. They get training and receive help to build greenhouses, in order to diversify their produce. They buy weaving looms and knitting machines, or equipment to process salt, which is plentiful in the south of Puna.

They never miss an opportunity for more training, or for making an investment.

However, this potential seems to go unrecognised by the municipal government. “People here have no entrepreneurial tradition, or experience of forming associations. There is a great deal of mistrust,” the head of the Social Action Department in Abra Pampa, Silvia Alanis, told IPS.

“Then there’s the big problem of the lack of markets. There’s no one to sell to, and they end up selling to each other,” added Alanis, whose programme of stipends for the women of the town of Abra Pampa has been unsuccessful.

She said that in the last few years, the national government funded 30 projects of the Manos a la Obra (“Let’s Get to Work”) programme, designed to promote small producers’ activities by providing money for tools. Each project receives a grant of 15,000 pesos (5,000 dollars), which does not have to be repaid.

But only two of those projects have prospered. “They were given tools for making crafts, they bought some inputs to improve their fields, but instead of improving their livestock they sold the animals to each other. It was as if they were content to have enough to barely subsist on,” Alanis commented.

In Lloveta’s opinion, trust is the key factor. “The Warmi aims at recreating the spirit of cooperation based on trust between the members of a community.” In contrast, the government institutions that provide subsidies and stipends have lost prestige in the last few years, he added.

“The people who receive subsidies feel as if they are the target of ‘clientelist’ practices, as they have been at many other times, and even when they are not asked to do so they feel they are expected to vote a certain way, or be submissive, in return,” the Avina economist said.

The Warmi, on the other hand, opposes subsidies because it believes that “they rob recipients of their dignity,” and works instead to create a system that is not dependent on aid grants, but is self-sustaining.

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