Wednesday, March 7, 2012

Passport Series: Salvadorans use loans to 'feed' the economy

This is the final post of a three part series taking a deep-dive look at El Salvador, its history with microfinance, Kiva's role in expanding opportunities for Salvadorans, and what it's like to participate in the country's economy as a borrower, lender and field worker. We hope you've enjoyed it and look forward to showcasing Benin this month!

When my friend returned from a trip to El Salvador, he couldn't stop talking about the food. He still longingly describes the think corn tortillas stuffed with cheese and beans called pupusas, the deep fried plantains he would eat by the handful, empanadas and tamales filled with tender meat -- sopa de pata -- which he said was better if the ingredients were left a mystery (main ingredients include cow’s feet and tripe) and rich tres leches cake.

He recounts how even in remote regions, he could always find a smiling woman selling food. Sometimes she would be at a roadside fruit stand, other times she'd be selling treats out of her home kitchen. Food stands and informal markets aren’t uncommon, but El Salvador's food sector is particularly prominent and vital -- and relevant to Kiva's mission to empower women and their under-served rural communities. 

Selling food informally is a survival strategy for the world's poor. At a low cost, these food vendors are able to eke out a living by providing small quantities of affordable food to people who lack access to traditional markets. Micro-entrepreneurs in the informal food sector process, cater and sell food, and transport it from place to place. Their activities not only benefit them and their families, but also promote food security and boost the local economy.

The food sector is closely tied to the agriculture sector. Food vendors offer farmers a more direct and immediate marketplace for their crops and produce. On top of that, their affordable meals free other people from cooking so they can be productive in other areas. Clearly, a lot rests on the shoulders of the smiling women my friend described after his trip.

On Kiva, one-third of our Salvadoran loans are used to start or grow food businesses. And, while the food sector is important to everyone, it especially offers women an opportunity to utilize skills despite limited training, education, funding and services. We know from experience that these women reinvest their earnings from food sales in their families, homes and communities -- making an even bigger impact.

El Salvador's large informal food sector is part of its defining sense of community. Those who have visited always comment on how Salvadorans value contributing to those around them and improving the lives of the next generation. This is very apparent in the regional programs that have been developed to address people's needs. Examples include Communal Credit Committees help borrowers access affordable credit fast, women's groups that have directed rebuilding efforts after hurricanes and storms, and community managed school programs to ensure quality education for El Salvador's youth.

Kiva is proud to work with partners in El Salvador who recognize the positive and important ripple effects of food and agriculture loans. Looking to the future, Kiva's Strategic Initiatives team is seeking new partners who could help us fund clean cookstoves in El Salvador (among other countries). Using efficient cookstoves helps to reduce fuel consumption and exposure to harmful smoke. That's just one more way Kiva hopes to address the collateral issues related to poverty alleviation.

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Photo courtesy of Dyanna.