Julio Alem Rojo is director of special projects at Centro de Investigacion y Desarollo Regional (CIDRE), the first partner organization we visited in the Cochabamba region. On the bus trip to Colomi (3200 m) we discovered a few things that we had in common: we both studied chemistry, we both used to live near Basel in Switzerland and we both worked in the pharmaceutical industry.
The similarities didn’t just end there. Both of us like to work on projects. While I managed the implementation of Oikocredit’s new websites, Julio’s latest project is the conversion of the non-governmental organization (NGO) CIDRE into a regulated financial institution as required by new Bolivian legislation. He returned to CIDRE to work on this project after having served as the organization’s managing director until 2006.
Turbulent years for Bolivia
In the course of our conversation I got the strong impression that CIDRE wouldn’t be what it is today without Julio’s contribution. Being a very modest person, he would certainly deny this.
As a young man, Julio’s life was in danger when General Luis García Meza took power following a violent military coup. The García Meza regime (1980-1981) was known for its extreme brutality, and left-wing activists were persecuted and even killed at the time. Julio managed to escape to Switzerland where he was granted political asylum. He managed to find a job in his own profession, working for a pharmaceutical company in Basel. You can still hear his Swiss German accent when he utters a few phrases in German.
Once the situation in Bolivia had improved, Julio returned to his place of birth: the city of Cochabamba. Unfortunately, he could not find a job in his own profession (chemical engineering). Eventually he came across the newly founded non-profit financial NGO CIDRE. Five men had founded the organization at the end of 1981 (and one of them is still an active member).
Julio was asked to develop a new branch of activities to support economic development in the least favoured sectors of the country: micro entrepreneurs and small farmers. He served as director of this department until 1994 when he became CIDRE’s managing director.
At the helm for more than a decade
During his 12 years in charge at CIDRE, the organization grew and professionalized thanks to Julio’s focus on organizational development, process improvement and financial sustainability. In 2005, the Inter-American Development Bank presented CIDRE with an award for excellence in social enterprise.
Julio’s first contact with Oikocredit dates back to 1988 when Stanley Miles from Oikocredit Uruguay (then named EDCS) visited Bolivia in an attempt to support Bolivian mine workers.
CIDRE has been granted four loans from Oikocredit with a fifth loan recently approved. CIDRE has received a total of almost $ 10 million from Oikocredit. As part of its transition to a bank for small to medium enterprises (PyME) CIDRE will need even more loans in order to grow its business and become a sustainable institution.
The office is already compliant with the new regulations: a strong room has been installed, as have security cameras and a complaints counter. An armed security guard stands at the entrance.
Professional processes and documentation
Julio proudly presents the documentation developed for CIDRE’s risk management. A lot of performance indicators were tracked in order to evaluate the loan portfolio. Oikocredit contributed to this with its capacity building programme.
Later, in the field, Angel Marquez Jimenez (regional manager in Colomi) shows us the forms used to write a simple business plan for an end-client and to determine how much the client can pay back in a given time.
Angel explains the various stages of the loan application and approval process. CIDRE mainly attracts new clients through local meetings or client recommendations. As required by law, clients come to the CIDRE office to pay back the loans. Collections in clients’ homes are not permitted. Angel is proud to report that the Colomi office has a portfolio at risk (PAR) of close to 0%. He relates this to the village’s matriarchal culture. Women are put in charge of bookkeeping and take the financial decisions. We hear this at virtually every end-client and organization we visit.
As a chemical engineer, Julio knows a lot about environmental risks. Part of the risk management is an assessment of a project’s environmental risks. If the potential impact is negative, the project is not financed. While this assessment is a voluntary arrangement, new legislation requires measures to tackle over-indebtedness. CIDRE uses the services of the private company INFOCRED to assess its clients with respect to the number of loans they have and their creditworthiness. As a regulated bank they would be able to access the central database directly and no longer depend on INFOCRED.
Other projects and plans
In addition to his work for CIDRE Julio has always been active in the field of consultancy and project development. He facilitated development co-operation between Bolivia and the Netherlands, Denmark, Germany, Great Britain and Switzerland on a whole range of subjects from offering viable alternatives to coca farmers to the construction of a hydroelectric plant which supplies Cochabamba with electricity and water.
By the end of 2014 the transition to a PYME bank should be complete, says Julio. On the road he tells me more about his dreams. In addition to the regulated bank, CIDRE wants to establish a not-for-profit development organization. Julio’s next project might focus on the development of organic insecticides. The Pyrethrum plant is known to be a powerful insecticide. It grows well in Bolivia’s lowlands but so far no local production or extraction process has been established. Julio wants to change all that and (being very aware of the environmental impact of the extraction process) establish a production process without harmful solvents. This can be done by using supercritical carbon dioxide extraction techniques.
Bolivia’s greatest resource isn’t oil and gas, it’s people like Julio Alem and micro entrepreneurs with great ideas, skills and a real desire for change. I am glad that Oikocredit’s support helps people like Julio to implement their plans. I am looking at how I can lend support to his pyrethrum project. Any ideas you may have are more than welcome!