Pleasantly Surprised

As organizations expand we find more hands in the pot, more people involved in decision making, and more variety in outcome expectations - making it harder to truly serve the best interests of a given community. Missions become bogged down in bottom lines while diplomacy and politics grow more important to sustaining the organization. Larger organizations often mean larger amounts of program money – a good thing – but also that the relationship with the community diminishes, leading to a disconnect between the wants/needs of the community and the opinions of the organization.

At least, that’s what I thought. I continue to see these tradeoffs happening at the expense of the people for whom they claim to work, but was pleasantly shocked last week in Xela to have my assumptions of a large-scale, public organization shattered.

Compartamos is Latin America’s largest microfinance bank. Based out of Mexico, beginning as a traditional nonprofit MFI and going public in 2007, they've expanded to Peru (March '11) and now to Guatemala (June '11). The billion dollar bank has opened its first office in Xela and just four weeks in already has 4 offices to handle the demand of its 2,300 clients. This public MFI tapped into my reservations that they (and many nonprofit MFIs) often generate significant profits from the poor they are supposed to be lifting out of poverty.

What shattered my assumptions was the high-touch customer service on which this billion dollar company relies and its flexibility to local conditions. Given its success in Mexico, I would have expected a simple transplant of that model to Guatemala. But instead they recognized the differences: the deeper poverty, the tradition of monthly payment instead of Mexico’s weekly, and the extent of rural poverty, which lies just 5mins from urban centers. They work 6 days per week, 10-12 hours per day and work on their clients' schedules, not their own.

Once a group is formed the two promoters and their supervisor attend meetings for group payments every two weeks (in Mexico it’s every week). These staff members never physically touch the money the women bring – the group’s treasurer handles it and seals it in a bank bag. Each member and staff has a history of payments signed by each of the 3 group leaders and the promoter. The group assigns the required amount for savings and penalty fees - building consensus and ensuring Compartamos won't be "the bad guy".

The first meeting we attended was a group of 12 women making their first payment. Here we saw the careful handling of money and the importance placed on attendance. The air, however, was full of anxiety, as this was probably the first time most of these women had ever made a payment on a loan.

The second meeting was a loan disbursement – the first time the women had officially gathered with Compartamos. We didn't begin until all members were present but the large room was electric with unspoken excitement. A touching moment was when 3 of the women shyly explained that they could not read or write and used the ink pad to sign with their fingerprint. This delicate situation was handled with ease by the staff, as if it were a common occurrence. 

The third was the a group of 14 making their second payment. They were more urban and a little better-off than the others. Where previous groups of rural Mayan women had been friends and family, this group were acquaintances at best – some still didn’t know the others’ names. The promoter handled latecomer fines well – not succumbing to attitudes and explaining that they are an example to their peers and families and by habitually saving they would pass that value to their children, creating greater opportunities in the future.

Not only did I witness a huge, public and profitable organization maintaining high-touch customer relations and flexibility with the poor, I saw a high-level of professionalism inherent in organizations in the game of providing a service for profits. I've felt for some time that organizations of any kind should be run as businesses. But as I am gathering experience with various business models – for and non- profit – I'm finding this is more important than I already thought. So many nonprofits waste time and resources because the bottom line is not a priority. As sacrilegious as this sometimes still sounds to me, that interest – appropriately checked by a strong mission – often leads to better service, efficiency and evaluation of practice and results. Of course this is not the only way to run a successful program, but I continue to see the benefits that come with this model.

There are lots of ways to solve a problem, don’t make assumptions until you see something in action, you never know when you’ll be surprised. The best way to know something is to go out in the field and touch it, I hope we all remember to do that as we work in our chosen field delivering services to others.