Banco Mariposa: A Student-Run Micro-lending Organization for Chilean Women
Banco Mariposa, a student-run organization, will give micro-loans to low-income female entrepreneurs in the city of Valparaíso, Chile.
About You
Location
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Your idea
Field of Work
other
If Field of Work is “other” please define in 1-2 words below
Economic empowerment
Year project started (or projected start date) (yyyy)
2008
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What is the primary problem your venture is trying to address and how are you addressing it (or planning to address it)?
To ignore the needs of the poor, including the poor in otherwise successful countries, is a great danger to humanity. This crisis can be seen in Chile, which boasts one of the most stable and advanced economies in South America. Despite its $231.1 billion dollar GDP, low unemployment rates, and significant foreign investment, 18.5 percent of the Chilean population lives below the poverty line. Many low-income people, especially women, do not have adequate access to the capital needed to expand their businesses. Poverty disproportionately affects women, and their small businesses would benefit most from receiving credit. Chilean banks only offer large loans with collateral from which they can turn a profit. This system fails the poor, who do not own enough assets to qualify as collateral, and who also do not have the income-earning potential to repay extremely large loans. Rather, the poor need an alternate bank to set up smaller individualized loans and repayment schedules without collateral, such as micro-loans. Micro-loans provide small loans to businesses, and will be repaid slowly. Therefore, Banco Mariposa will address the inequitable distribution of wealth and real need for micro-loans in Chile by offering financial resources to low-income women entrepreneurs.
Name Your Project
Banco Mariposa: A Student-Run Micro-lending Organization for Chilean Women
Describe Your Idea
Banco Mariposa, a student-run organization, will give micro-loans to low-income female entrepreneurs in the city of Valparaíso, Chile.
Innovation
Project Description
Banco Mariposa, a student-run organization, will give micro-loans to low-income female entrepreneurs in the city of Valparaíso, Chile.
Unique and different
Micro-lending is an innovative effort to empower women. It redefines banking as a socially-aware industry, and values trust in the repayment process. It gives women the power to use their talents to start and expand business ventures that will improve their economic status. It also creates a unique system of repayment, in which group members are responsible not only to the lender, but also to each other. If a group member is unable to make a loan payment, the group will assume the difference for that week. These communities of women support and encourage each other through the process, while developing leadership, building teamwork and maintaining accountability.
Under the micro-lending umbrella, Banco Mariposa is also a unique program. Banco Mariposa is completely student-driven and provides leadership opportunities on an international scale for college students. It creates international partnerships between students Benedict (CSB), a liberal arts college for women in Minnesota, students of Universidad de Adolfo Ibáñez (UAI), and women of the city of Valparaiso, Chile.
Project plan
Banco Mariposa will give the first micro-loans of $250 each to two Chilean women by January 2008. Once the loans are distributed, support group meetings to collect loan repayments will begin on a weekly basis. Meanwhile, Banco Mariposa will continue its mission by increasing awareness of opportunities for micro-loans for women in Chile. In addition, we will apply for more grants and funding. In the next six months, Banco Mariposa will recruit five students to lead the program in Chile in August 2009.
Partnerships
Although it started with one professor and one student, we have already experienced tremendous growth. Our most important partnership is with Jefas de Hogar, an organization in Valparaíso that provides business training to low-income women. Ashleigh Leitch, a founder of Banco Mariposa, volunteered with Jefas de Hogar and we have continued the relationship. Chileans who are involved in Jefas de Hogar will be our first applicants for micro-loans and the staff of Jefas de Hogar will facilitate the weekly loan repayment meetings.
In addition to Jefas de Hogar, we have partnered with two universities, several faculty members, two alumnae, and a core group of dedicated student volunteers. We have created these partnerships through personal contacts in both countries, utilizing networks, giving educational presentations about micro-lending, and developing personal relationships. It is important to take the time to meet with each other and our partners, as well as with new people who offer their help and innovative ideas.
Impact
Impact
The impact of our micro-loans is to promote economic independence and financial stability for our clients, and to foster leadership opportunities for participating students.
Effectiveness
There has already been a significant impact on students through community interest and education. The first loan is anticipated to be given by January 2009.
How do you engage and impact the community?
Too often those who directly serve the poor take on an attitude that only they have the correct answers to the poor’s problems. This kind of attitude does nothing to empower low-income people and often overlooks the valuable knowledge and experiences of those in need. Banco Mariposa is very careful to avoid this attitude and to recognize the tremendous talents of low-income women.
We have two different approaches for developing the strengths of the community. From the American perspective, we seek to improve students’ cultural competency and offer opportunities for experiential learning in their field and direct service. Alternatively, we hope to work with Chilean students to create a stronger tie between the CSB study abroad program and UAI. UAI has a strong reputation as a business university, so we will utilize this advantage by incorporating faculty and students to help with the program.
Our prospective clients also have a lot to offer, and Banco Mariposa will work with them to enhance their strengths. Our potential clients are drawn from a pool of women who already operate small businesses, so they understand basic business principles and what they need to do in order to expand. In some cases, Banco Mariposa will seek only to refine skills the clients already have, such as re-tooling a business plan. In other cases, Banco Mariposa will seek to teach new skills, such as web site design and marketing skills in conjunction with Jefas de Hogar.
If these women are producing more, spending more, and breaking the cycle of poverty for their children, the results will positively affect the community. We have worked hard to engage community members by recruiting and educating students, and by applying for community grant money. By engaging members of the community, we can effectively impact those who are less fortunate. Low-income entrepreneurs already have the necessary abilities to be successful, but they need access to credit to propel their businesses to the next level.
How do you measure this impact?
Banco Mariposa will monitor our clients’ results by comparing the application survey with an exit survey. We will measure the change in income, business volume, business skills, financial self-sufficiency and leadership development of our clients. These measurements will be concluded in qualitative and quantitative terms. We are especially interested in comparing the clients’ level of income before and after the completion of the loan to highlight how the loan has improved their businesses and lives. Finally, Banco Mariposa will provide a full annual report of our successes and challenges to our supporters and funders.
Obstacles
The largest obstacle to success is non-repayment of loans. Banco Mariposa has taken necessary precautions to avoid this, but we cannot completely eliminate the risk. If challenges arise, Banco Mariposa will re-evaluate the strategy, make necessary improvements, and apply for additional grants to cover the losses.
An additional obstacle is that distance could impede decision-making and communication. In light of this challenge, we have determined that Skype and e-mail will be the primary modes of communication between staff at CSB and in Chile.
This Entry is about (Issues)
Sustainability
Financing source
(or how do you expect your initiative will be financed)
We have received one $1000.00 grant from CSB and one $1000.00 CASE grant from the Jimmy and Rosalynn Carter Partnership Foundation. As we still have not reached our funding goal, we will continue writing grants and seeking donations from alumnae.
Aside from financial sustainability, how do you plan to grow and sustain your project?
Banco Mariposa combines technological outreach with academic opportunities to maximize connections with students and recruit volunteers. We will give informational presentations about Banco Mariposa in all entry-level Economics, Political Science and Spanish courses. We expect these presentations will produce interest in volunteering. We established online resources such as creating a blog and a facebook group that boasts over 75 student members. In addition to the social networking, Banco Mariposa will give a formal academic presentation on Banco Mariposa in the spring of 2009 and lead a book group on “Banker to the Poor.” These activities would be an interactive way to raise awareness about micro-lending at CSB. We plan to conduct similar outreach initiatives at UAI to sustain community involvement and civic engagement.
Our long term goal is for Banco Mariposa to become an institutionalized part of the CSB Chilean study abroad program. Banco Mariposa also will work to develop unofficial partnerships with seasoned micro-lending organizations such as Pro Mujer and ACCION International that focus on economic problems within the South American cultural context. Though they are not located in Chile, Banco Mariposa could utilize their knowledge and expertise to make its program more sustainable and successful.
Finance details
Currently, Banco Mariposa has raised $2,000.00 and we already spent $350.00 to purchase training materials on micro-lending practices. Also, we plan to spend another $100.00 to print promotional materials to market our program to potential volunteers and donors. This leaves us with $1, 550.00 to use for giving microloans, paying the staff small stipends, and purchasing office supplies. To be a sustainable organization, we plan to have a minimum annual budget of $2,500. To make up this difference, we are applying for funding through grants, such as the Seed Grant from the Staples Youth Social Entrepreneur Competition. Our organization is already raising awareness at CSB and UAI in order to recruit more volunteers. As in-kind donations, we have three volunteers at CSB who are donating their time by writing grants and raising awareness, and two additional students who are currently volunteering at UAI.
Creative funding
We will utilize the donor network of CSB to identify and contact potential donors. Developing this donor base is a creative way for us to build on our fundraising strengths as a student-run organization.
Other non finance needs
Banco Mariposa primarily will rely on the volunteer services of students. As an unpaid intern, a CSB student will serve as the Executive Director. Two additional CSB students will be volunteer Loan Officers during their study abroad in Chile. Two UAI students will receive stipends for their work as Loan Officers until the next group of St. Ben’s students comes. To provide stability when students are unavailable, Jefas de Hogar has committed a part-time staff member to be paid by Banco Mariposa.
The Story
Motivation
During her 2007 “State of the College” address, President Mary Ann Baenninger challenged the students of the College of Saint Benedict to take a stand against injustice faced by women in all parts of the world. That same year, Ashleigh Leitch was one of the students from the College of Saint Benedict who studied abroad in Chile for four months. She taught English classes twice a week with Jefas de Hogar. Ashleigh loved the time she spent with the women of Jefas de Hogar: they were welcoming, determined to improve their financial situations, and forgiving of her many Spanish grammatical mistakes. One of her professors assigned a research project while she was studying at Universidad de Adolfo Ibáñez, and Ashleigh proposed researching the potential for a micro-loan program in Valparaiso. “Great idea,” her professor responded, “but why don’t you actually do it?” Thus, Banco Mariposa was born.
In forming this project, not only will our students directly confront cycles of poverty, gender discrimination, and cultural differences, they can also effectively rise to and exceed the call to action by President Baenninger. The founding principles of this program perfectly complement our institutional mission and Benedictine Values. The program projects classroom learning onto real world scenarios in order to make a profound contribution to the lives of the poor. Overall, Banco Mariposa develops a strong sense of activism, awareness of global gender and economic issues, and unique educational opportunities for our students.
Awards
Banco Mariposa was featured in the CSB newspaper, but it has not received any official awards yet. Our founder, Ashleigh Leitch, was a 2008 finalist for the Truman Scholarship, which is a national competition for students seeking graduate degrees and careers in the public sector. Ashleigh believes she was able to advance so far into this prestigious competition because her involvement with Banco Mariposa displayed initiative and a drive for social justice.
Broader context
Banco Mariposa is fueled by the shared desire of so many young leaders to make a lasting impact on the world we have inherited. We cannot see and experience the poverties of others without being moved to action. Like other projects in this movement, Banco Mariposa will nurture leadership among young people and create a new kind of active, passionate, and compassionate leadership.
Banco Mariposa’s specific areas of concern reflect many of the current social change movements. Banco Mariposa’s drive for social justice is displayed by its commitment to the empowerment of women, economic security, and global awareness. The success of Banco Mariposa will make immediate changes in the lives of women while also creating the next generation of social entrepreneurs. By sharing our story as an organization inspired and run by students, we strive to empower students to realize their ability to be change agents. To strengthen this movement, the leadership of Banco Mariposa will gladly provide knowledge and advice for future micro-lending endeavors.
Ongoing
As one of the founders of this program, Ashleigh plans to remain involved with Banco Mariposa in some manner after she graduates from the College of Saint Benedict. She is very passionate about improving the economic status of women throughout the world, and she would like to have a career that reflects this interest. Currently, Ashleigh is researching job opportunities with micro-finance organizations, so she envisions having a long-term personal and professional commitment to Banco Mariposa and micro-lending.
What is your age?
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How did you hear about this competition?
Terri Barreiro, the Director of the Donald McNeely Center for Entrepreneurship at CSB, referred us to your website and this grant. She believed the mission of Banco Mariposa would be a great fit with the goal of the Staples Youth Social Entrepreneur Competition and the Ashoka Foundation.
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