Fundación Mujer began in San Jose, Costa Rica thirty years ago when microfinance was newly expanding. Muhammad Yunus began giving out micro-loans in Bangladesh in 1977; after only a short decade this method of empowering the poor had taken hold. It’s a simple concept: if the poor get reliable access to credit, with little collateral and reasonable interest rates, they can build self-sufficient businesses.This idea won Yunus the Nobel Peace Prize in 2006.
Fundación Mujer has positively impacted its community since its start. The leadership and staff are passionate about helping their clients succeed as entrepreneurs. Running a business can be incredibly tough. Micro entrepreneurs who use Fundación Mujer’s services get a credit line along with specialized follow up to address needs as they arise.
The Technical Side of Micro-Credit
Fundación Mujer originally started as a feasibility project by the United Nation’s Labor Department to teach agricultural skills for pig and chicken farming. However, after a three year pilot it was decided that the community needed microfinance for all women owned enterprises, not just agricultural ones. In 1988 several international organizations, such as ACCORD, the Intermerican Development Bank, and the Interamerican Foundation joined together to provide Costa Rica with microfinance funding. Fundación Mujer is one of the several organizations that got its start during that time.
For a business to qualify for credit from Fundación Mujer it must meet certain criteria. It must have been in operation for over a year plus the requester must have a legitimate business need for the loan. A credit specialist is assigned to each client to conduct a formal evaluation of the client’s cash flow and ability to pay back a loan; from this the client’s credit limit is established. The credit specialists go out into the field to meet client’s at their homes and see the business first hand.
There are several funds available to clients. There are funds provided by the Costa Rican government for those in extreme poverty where the government acts as the guarantor in case the client is unable to pay back. Other funds require a form of guarantee, which could be in the form of a salary guarantee from someone close to the client, or a lien against a client’s property.
In addition to providing credit Fundación Mujer also offers entrepreneurship courses. Courses can be taken at its main office or given by credit specialists out in the field depending on the client’s needs. Workshops could cover topics as diverse as cash flow, marketing, inventory management, and how to establish a formal business with required licenses.
Some credit lines are for individuals, while others are for groups. Group loans are usually for group activities, such as raising pigs for sale or managing a glass blowing business. Group loans are also used when an individual who does not qualify for a loan is able to find other people who are willing to take out a group loan.
The Personal Stories of Credit Recipients
I was given a chance to visit a group in the Coyolito mountains, a very rural area of Costa Rica along the Pacific coast. The group was on their third round of credit. The funds were used to build Coyolito’s only event hall. The hall is used for a lot of different types of activities: for birthday parties, as a school hall for major presentations, and as a restaurant on weekends.
The group is made up of eight women who worked at the hall as organizers, merchandisers, sales agents, and maintenance workers as the need arose. All the group members are housewives with children, who worked on the event hall as a part time job. Every month they were motivated to work to pay the month’s loan quota and the rest of the profits were divided among them. The women were very sweet and showed a lot of pride in their hall; they shared how it had changed from a little shack to a full blown hall. This third loan would be used to strengthen the windows against Coyolito’s notorious wind.
Of the many entrepreneurs I got to talk to one that stood out particularly is Ana. She immigrated to Costa Rica from Nicaragua over 20 years ago. After some brief stints as a housekeeper she began to sell food door to door. Although she did not have a formal business plan and her illiteracy prevented her from tracking income and expenses, she still has a thriving business and has been able to build herself a comfortable home.
When I began asking Ana about sales she complained that she had not raised prices on her nicatamal in years; she charged less than competitors even though hers were bigger and had more meat. After some digging one of her friends explained to me that although Ana’s profit on the nicatamal is small, this keeps her clients happy and loyal. The nicatamal is usually a Christmas time meal. By making less during one portion of the year she keeps clients loyal for the rest of the year.
Despite her illiteracy Ana proved to be a savvy business owner. She enjoys her line of work because it gives her a lot of flexibility and a steady living. Ana has built a clientele in a specific district of San Jose where she sells to families as well as to businesses who re-sell her product. She’s in her late 50s and has trained her 24 year old son to cook. They wake up at 5am to make that day’s food and then set off around 10 am to sel for lunch time. He rides a bike with a basket full of the day’s food while she walks along serving clients. Ana plans to continue selling door to door for the next few years. She’s considered opening up a small restaurant in front of her home, but she dislikes the idea of having longer hours. Currently her work day is usually over by 1pm and she likes having her afternoons and evenings off. In true Costa Rican fashion, Ana values quality of life over profit. That’s what I call pura vida.
2017 Fundación Mujer Awards
At the end of each year Fundación Mujer hosts an award ceremony to recognize the top businesses of the year. I was invited to be one of the judges and it was one of my favorite experiences during my time with the organization. There were five awards and a total of thirteen nominees from industries as diverse as tailoring, to singing, to plant nurseries. Below is the business description for each of this year’s winners along with a video interview of each of the nominees.
Premio Desarrollo Empresarial – Award for Business Development: Liliana Vásquez
Liliana is from Pocorá de Guácimo. Her business is called Creaciones Crisnali where she sews all types of clothes, from undergarments to clothing for adults and children. She began her business because her husband’s earnings were not enough to provide for their household.
Liliana learned about Fundación Mujer thanks to a coworker at a factory, who also taught her how to sew. Fundación Mujer has helped Liliana grow her business and she feels well supported by it. In the future she’d like to have ready-to-wear garments in multiple sizes so her clients have more variety to choose from.
During Liliana’s presentation she was very enthusiastic. She shared her clothes sold very quickly and she always had orders to work on, although she hardly advertises. Liliana had brought along a dress made out of a lycra polyester blend. She stretched its seams to show how well made it was while explaining that although most people hate working with lycra blends, she loves it. In her words, she has a knack for getting the material to comply. Lately people have begun to ask her for custom made bathing suits and she’s enjoying the process of learning a new style of clothing.
Premio Superación y Esfuerzo – Award for Self-Help and Effort: Marta Doris Ramírez
Marta Doris is from Agua Caliente in the province of Cartago. She is a singer and has a musical ministry called Sol de Justicia. In addition to singing at churches, she also sings at many other types of events. Although blind, Marta Doris has not been held back by her disability. She has been a singer for the past 30 years and has even recorded several songs. The majority of her career has been with religious groups, however she’d always dreamed of branching out on her own.
As a business owner she feels empowered. She has found a purpose and knows that she can keep going despite difficulties. She sees herself as an example for others. Marta Doris learned about Fundación Mujer through another government program for low income individuals. In her opinion, the most important thing for her has been the organization’s faith in her ability to manage her finances and business affairs despite her disability. The funds borrowed have been used to upgrade her equipment.
Marta’s presentation was very passionate and appreciative of Fundación Mujer’s support. Her enterprise is truly a family business; she sings and her daughter assists with equipment set-up. Marta Doris showcased her voice by singing a traditional Costa Rican song acapella.
Premio Grupo del Año – Award for Group Credit: Banco Mujer Rescatar la Tierra
The group is comprised of ten indigenous women who work out of their homes to plant bananas and plantains. They began their enterprise ten years ago to supplement their family’s income. Thanks to the credit provided by Fundación Mujer their business has grown. Their families are economically more stable. In recent years, they have even been able to hire outside labor for heavier field work.
They learned about Fundación Mujer thanks to friends who had used the organization’s services before. Fundación Mujer has assisted the group with cash flow management and business administration. The banana and plantain sector in Costa Rica is mostly served by factory farming, especially the export market. Banco Mujer Rescatar la Tierra faces fierce competition, yet they’ve continued to have a profitable business for over a decade serving their regional market.
Premio Hombre Empresario del Año – Businessman of the Year: Freddy Espinoza
Freddy lives in Dulce Nombre in the province of Cartago where he owns a butcher shop. He began working at a butcher shop at the age of 14; even at that young age he was confident he would one day get to open his own shop. As time went on he learned about all aspects of butchering as well as how to manage a business. Three years ago he was presented with the opportunity to buy an existing shop from a retiring butcher. Since then Freddy has experienced a lot of changes in his life: he has more responsibilities and he is now a source of support for his local community.
Freddy holds Fundación Mujer as his right hand because thanks its support he has been able to grow and develop a robust business. He works to make his business grow for the well-being of his family and his employee’s families. Freddy spoke of taking cooking courses to offer ready-made food in addition to meat and other traditional butcher products. When Freddy shared his vision for the future his entrepreneurial drive was easy to spot.
Premio Mujer Empresaria del Año – Businesswoman of the Year: Ana Celia Solano
Ana lives in Lagunilla in the province of Heredia. Her micro enterprise is called Creciones Titi and functions out of her home. She makes pastries, sews decorative home items, and re-sells other home accessories. Ana began her business as her kids grew older and gave her more free time. She truly enjoys her business because it gives her a strong additional income and the flexibility to create her own hours. This last part is important as she used to be the primary caretaker for her children, and now cares for her grandchildren.
In addition to loans, Fundación Mujer also helped her through entrepreneurship courses that gave her the confidence to run her business alone. During Ana’s presentation she talked about changing up her inventory depending on the season; for example in December she makes traditional Costa Rican Christmas cake, which is reminiscent of English fruit cake. Ana is also quick to buy up craft material when she finds a good sale, but over the years she’s learned to avoid excess inventory as she’s had to mark it down in the past. Upon awarding her as businesswoman of the year, Fundación Mujer also asked her to be a mentor to the many other women who are starting out their own micro enterprise.
Micro-Credit and Pura Vida
The three months I spent volunteering with Fundación Mujer were very instructive. The women and men who use its credit come from very varied backgrounds, but they are all working for a better standard of living. Costa Rica is an expensive country relative to its other Central America neighbors, partly due to taxes and government regulations. Although it streets are lined with potholes, tap water is safe to drink and medical care is accessible to everyone. The country has amongst the highest literacy rates in the world and is cited as one of the happiest countries by Blue Zones.
In fact, Costa Rica’s peaceful people and stable government make it a prime destination for refugees, primarily from neighboring Nicaragua. To aid with the influx of refugees Fundación Mujer began to teach entrepreneurship courses to refugees in 2016. My experience with Fundación Mujer has shown me that entrepreneurship and micro-credit are great ways to empower the poor. It was a pleasure to get to know Fundación Mujer, its great work, and the Costa Rican culture of pura vida.