Skip to main content
Tough love brings microfinance success

Maricela Gamboa, executive director of the microfinance organization Grameen Chiapas, claims she lost 10 kilos during the seemingly interminable years she spent fighting (her word) with the IDB to qualify for a loan. During this time, her sparring partner was Javier Rowe, an operations specialist in the Bank’s Mexico City office. Today, both are happy to let bygones be bygones, and Gamboa greeted Rowe at her offices in San Cristóbal de las Casas with a big smile and a kiss on both cheeks. For his part Rowe had nothing but praise for Gamboa and Grameen, and what each have accomplished to help thousands of very poor women in Mexico’s southernmost state of Chiapas to both increase their production and raise their self-esteem. Here Rowe talks with IDBAmérica’s Roger Hamilton.

IDBAmérica: What do you see as the main lesson that emerges from Grameen’s experience with the IDB?

Rowe: The main lesson is that credit should help people to progress, to increase their self-esteem. Clients should not be treated simply as borrowers, but as partners and friends.

IDBAmérica: Why did it take three years for the IDB to agree to finance Grameen?

Rowe: Actually it took a little more than four years. Grameen thought it was qualified, but the reality was that the organization needed stronger credit and financial mechanisms.

IDBAmérica: So they had a lot to learn. How did they go about it?

Rowe: Through persistence and paying attention to our recommendations. I gave them the name of a consultant, a very good person with a great deal of experience. He worked with them for two months, all paid by Grameen.

IDBAmérica: So instead of getting angry and continuing on their own path, they were determined to change.

Image removed.Grameen’s seven branch offices bring the credit program to the people.

Rowe: This is exactly right. Our friends from Grameen have always acted in a very positive way. They have taken the Bank’s criticisms constructively. In particular, they had to change some of the practices of the parent Grameen organization in Bangladesh that were not suited to Chiapas. In Bangladesh they give a lot of attention to the social aspects of credit programs, which is a huge operational expense. Everything involved in creating and managing groups is very expensive. In any event, indigenous people in Chiapas are interested in action and production, not group training. The groups needed some training, of course, but not so much. So our recommendation, that they didn’t like very much, was to forget about these programs that were not producing any results and move right ahead with a solid credit program based on solid financial practices.

IDBAmérica: Did you see this as a way to achieve self-sufficiency?

Rowe: Self-sufficiency is basic in any credit operation in which its normal income from repayments must cover costs and operational expenses, repayments on the IDB loan, with some left over for capitalization, at least to cover costs of inflation.

Grameen has learned its lessons well. It has achieved operational self-sufficiency, and has grown in numbers of employees, in branch offices and in the size of its portfolio. When we first made contact with Grameen it had a portfolio of a million pesos. In just four and a half years it has grown to some 30 million pesos.

I can say that Maricela has been our number one ally, insistent, stubborn and determined to do things better. She took it upon herself to get the support of people within Grameen, who are the group’s greatest resource and who are thoroughly committed to their work.

IDBAmérica: Are you proud of Grameen?

Rowe: How could I not be proud? When I first knew Grameen it was almost nothing, and today what we see is incredible. I am very proud of Grameen Chiapas.

Jump back to top