Purpose, Capacity, and Morality
How the leader of a communal credit committee in El Salvador is stewarding economic development in partnership with MCE borrower CrediCampo
Elvis Estella Vazquez de Flores is a smallholder farmer and mother of five in Cantón San Francisquito, a community outside of San Francisco Gotera in the Morazán Department of eastern El Salvador. The eldest of six siblings, Elvis grew up with a strong sense of responsibility—a responsibility to care for her family and her community, one that she carries with her to this day. She and her brothers and sisters were raised in Cantón Sensembra only a few kilometers from where she lives now, but for Elvis, San Francisquito is home.
Although her children have all grown up and married, her responsibilities as a mother have never ceased. Elvis lives with one of her sisters, her twelve-year-old granddaughter, and four nephews, the children of one of her sisters who currently lives in the United States. With all of the clothing to wash, dishes to clean, and meals to cook, Elvis says, managing her household is a full-time job in and of itself.
Elvis receives remittances from her sister in the United States to help pay for her nephews’ food and education, but the majority of her income comes from farming. On top of her responsibilities as the head of the household, Elvis owns four hectares of land on which she cultivates primarily corn—a skill that she learned from her parents as a child. She also grows cucumbers in a nursery that she built near her house.
Elvis is a loyal client of CrediCampo, a cooperative in El Salvador that seeks to alleviate poverty and empower rural communities through access to credit and community development services. Founded in 2013, CrediCampo spun out of Fundación Campo, an El Salvadoran foundation dedicated to the sustainable development of rural communities. Since 1995, Fundación Campo has worked to strengthen local institutional capacity and facilitate public-private partnerships to manage and implement community development projects across El Salvador. Together, CrediCampo and Fundación Campo are uniquely positioned to provide rural communities like San Francisquito with the products, services, and support they need to advance economically.
CrediCampo and Fundación Campo work primarily through Associations of Communal Development (ADESCOs), which are legally structured communities within municipalities in rural areas of the country, mainly composed of smallholder farmers like Elvis. This unique distribution model enables the CrediCampo and the foundation to access the most remote and underserved segments of the population, where their work has the greatest impact. The ADESCO in which Elvis lives is called “Adescosaf” — short for “ADESCO de San Francisquito.”
Sixteen years ago, Fundación Campo approached San Francisquito to form a communal credit committee among its residents, a group that would work in conjunction with the foundation to determine and facilitate projects to benefit the community. The committee would also be responsible for the selection of borrowers to receive micro-loans (from Fundación Campo at first, then CrediCampo starting in 2014). Elvis was chosen as the president of this committee, and has held the position ever since.
“I’ve been president of the credit committee since the beginning. Sometimes people have asked me, ‘who would want that position? It takes so much time, and so much work.’ There are not many people who would volunteer for this. But I like it, and the work that we do as a committee is very important for the community. I’m always very motivated by our work here.”
The responsibility of selecting who receives a loan and who does not is not one that Elvis takes lightly. From her perspective, there are three main qualities that a person must have in order to be approved: purpose, capacity, and morality. With well over a decade of experience in her position, Elvis believes that it is irresponsible to make a loan to someone who lacks these three qualities. She works every day to embody these qualities herself and instill them in her community.
The office of the communal credit committee is located in Elvis’ own home, marked by a sign on the edge of her property. Members of the community visit frequently, sometimes daily, to solicit new loans, fill out paperwork, or discuss any issues they may be having. According to Elvis, having the office located within the community is extremely beneficial—borrowers save both time and money, because they don’t have to pay for transportation to get to town.
Elvis has been a borrower herself since the credit committee was first formed in 2003.
“We first applied for a loan to continue working our land. I have always had a loan from CrediCampo, for many different purposes. Sometimes to purchase seeds and fertilizers, sometimes cattle, and more recently to make improvements to my house. I pay monthly, and when the loan is paid off, I apply for another. I have years of working with credit, and thanks to God the loans have always helped me well.”
More than forty families in San Francisquito have a loan from CrediCampo—a significant number in a community with fewer than 550 residents. One of the most important aspects of the relationship, says Elvis, is the education that borrowers receive through CrediCampo and Fundación Campo, particularly regarding financial literacy and management.
“Before one applies for a loan, they have to think first. I know people who have taken out a loan without knowing how to manage the money, and it did not end well. That loan generates interest, so you have to put the money to work. If you don’t use it responsibly, the money will waste away. This is why the trainings are important.”
Financial literacy is a key component of economic development, and one way in which CrediCampo and Fundación Campo enhance the social impact of their operations. The foundation focuses primarily on market research, organization, and development of ADESCOs to expand CrediCampo’s network of borrowers where the need is greatest. Once these ADESCOs are established, Fundación Campo acts as a liaison between the communities and their local governments to facilitate development projects while CrediCampo manages the microfinance and savings aspects of the relationship. Together, CrediCampo and Fundación Campo provide financial education, health services, and leadership training that benefit the entire community.
Over the years, CrediCampo and Fundación Campo have facilitated over fifty community development projects, including building schools and health clinics, paving roads, and bringing electricity, clean water, and other infrastructure to rural communities in El Salvador. These types of projects are a priority for Elvis.
“For every loan that we give, one percent of the total amount is reserved for the community. We used these funds to construct new walls in the school down the road. This year, we hope to build a bus stop as well.”
Elvis has helped lead the economic development of San Francisquito by stewarding the provision of micro-loans and working with CrediCampo and Fundación Campo to manage projects that keep her community’s best interests at heart. Other microfinance institutions have approached San Francisquito with offers, but Elvis says their interest rates are much higher. And importantly, they do not share the same level of trust, friendship, and collective responsibility that CrediCampo and Fundación Campo have fostered with the community of San Francisquito.
“There are many here who are working with CrediCampo, many who have loans and many who have savings accounts as well. That is to say, we have a lot of trust in them, and they return that trust. The credit officers and staff at CrediCampo and Fundación Campo are honest people who care about us. Thanks to God and their good administration, we have lifted ourselves up immensely.”
CrediCampo has been a part of MCE’s Microfinance Institution (MFI) portfolio since June 2015 when MCE made its first loan of $1,000,000 to the institution. MCE has since made a total of four loans to CrediCampo. In 2018, MCE disbursed a total of $1,400,000 as part of a maximum exposure facility, which is capped at $2,500,000. Most recently, MCE disbursed $300,000 to CrediCampo in February 2019 to support the institution’s continued growth and social impact in rural communities throughout El Salvador.
As of June 30, 2019, CrediCampo had a loan portfolio of $50.4 million serving more than 29,400 borrowers, 46% of whom were women.
Story and photos by Harrison Pharamond, MCE Impact Analyst and Communications Associate
