Microfinance can be a Double-Edged Sword

Nestor SicajáHow did you get into the MF field?

Before I started working [with FAC] I was working with a bank in the area of micro-finances. There, I received training on this topic and that is how I started working in the field of micro-finances.

How did you know that micro-finances was something you were interested in?

I like numbers all around and since micro-finances involve keeping records of payments, balances, and interest rates that is why it caught my attention and it is something I feel comfortable working with.

Do you believe in MF? Do you believe MF really helps people in the end?

If they are handled correctly yes but it is a double-edged sword. You can see bad example of this with credit cards. In a case like this if the credit is not handled correctly you can end up in a worse situation than you were before. A good way to handled credit, now that I know both sides of the coin, starts with finding a good institution to get the credit from. I would definitely choose an institution like [FAC] to get my credit instead of a bank.  Then you have to use the money to make an investment, in a business for example, and then taking care of your investment. Sadly, from our experience, we have seen that people not always have a commitment with the business. That is why micro-enterprises are not very profitable or don’t last longer because people don’t put the effort or commitment that is needed. In summary, a good way that MF helps people is if they make a good investment, take care of it and also take care of the money they make, their income and also their expenses.

How would you describe a client-centered MFI?

Here we can mention the differences between [our MFI] and a bank. A bank’s focus is the money. Maybe when you contact them they treat you very well but, after the disbursement has been made the credits official that was working with you loses connection with you because his interest is to find another client to give another loan. That means he is not concerned about how you invested your money or if you are doing well with your investment. What we are doing is different from a bank. We also work with money but our main objective is to take care of people, their needs and how we can help with these.

How did you think your experience with MF was going to be when you started? Were there any surprises?

This relates to what I mentioned before, seeing the difference between how a bank works and how we work, focusing on people instead money and just finding the next client.

A surprise or eye-opener moment was when I was working in the bank, where I learned a lot of the concepts which I use now.  There I learned that after giving a credit to a person, they took full responsibility for the money and the use of it, if you use it wrong you still have to pay it, this means there is a risk of ending worse than you were before if you could not pay it back. The surprise I had here was understanding the importance of knowing how to manage money because this could lift you up or bring you down especially when managing money that is not yours.

Which are the biggest challenges that MF faces today?

I personally see it this way, when you talk to someone about MF the first thing they relate it with is debt because they do not understand what it is. So, one of the biggest challenges I see is people understanding what MF really is.

Nestor Sicajá is a credit officer with FAC International. The interview was conducted and translated by Samuel Brizuela.

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