Melba’s Motorcycle
How a small Colombian MFI created a new opportunity through productive asset financing
Melba Pipicano Pipicano is a hard-working micro-entrepreneur and mother of three in Cali, Colombia. She grew up in Pitalito, a town about eight hours south of Cali that is often considered the largest producer of coffee in Colombia. While she’s lived in Cali for over 25 years, Pitalito will always hold a place in her heart. Until a few years ago, Melba used to work for a small restaurant in Cali. But one day she was inspired by one of her friend’s success with their own food cart, so one day Melba decided to start her own. That’s when she found Finamiga.
Financiación Amiga (“Finamiga”) is a small Colombia microfinance institution (MFI) that serves a niche market through motorcycle financing for productive use—specifically micro-entrepreneurs and farmers that need vehicles to transport their goods to market. Finamiga partners with motorcycle manufacturers in Colombia, purchases the motorcycles, and “rents” them to borrowers until they make their last payment, at which point ownership of the motorcycle is transferred to the borrower.
Melba’s first loan from Finamiga helped her to start up her new business activities, including purchasing the food cart that she uses to cook meals for her customers. With her second loan, she was able to finance the motorcycle that she now uses to purchase and transport ingredients from the market or her house to her food cart. With lower interest rates and a loan application process that is easier than other institutions, Melba said she was lucky to find Finamiga when she did. Her food cart is even located outside of the same dealership where she discovered Finamiga and purchased her motorcycle.
Located on a busy street of Cali, Melba makes a variety of food for lunch for people passing by, including many loyal customers who come back daily. Arepas, pan con queso, and chorizos colombianos are some of her most popular menu items. She typically works a long day from 6am to 10pm, but for Melba the motorcycle makes a big difference. She used to have to carry her supplies onto packed public buses, which was physically exhausting, took much longer, and also limited the amount of ingredients she could transport in a single day. The motorcycle significantly reduces her transportation time, thus increasing the quantity of ingredients she can carry and the amount of time she can dedicate to running her food cart on any given day. Melba’s income is improving as a result, and she hopes to start making improvements to her house as her savings grow.
Finamiga has been a part of MCE’s MFI portfolio since January 2019, when MCE made a loan of $500,000. As of June 30, 2019, Finamiga had a loan portfolio of $6.3 million serving 8,434 borrowers, 53% of whom were women.
Story and photos by Harrison Pharamond, MCE Senior Impact Analyst
