Travelling in the Ecuadorian Andes. It is seven o’clock in the morning, and a heavy fog still covers the mountains. We are in a minibus on the way from Riobamba to San José de Chimbo, where we will be visiting the Cooperativa San José.
The credit and savings bank has been an Oikocredit partner organization since 2007. We have an appointment at nine o’clock with the CEO, and there are still quite a few miles to cover. Which is why we can’t stop to look at every single group of Vicuñas we see grazing on the side of the road. But we do stop to look at a few, hopping out of the bus and cautiously attempting to approach them. How often do you get to see Vicuñas in the wild, and so close? These shy animals are a little smaller than their relatives, the alpacas and llamas, and cannot be domesticated. Vicuña wool is some of the finest in the world. Even the Incas drove these gregarious animals together, sheared them, and then set them free again.
The road takes us over a pass around 4,000 meters above sea level. From the fog, and before our eyes, the snow-covered volcano (Chimbaro) appears, rising 6,300 meters from a lunar-like landscape. One bend further, and it shines in the sunlight. “The highest mountain in the world! If you measure from the centre of the earth,” says Patricio Torres, our Ecuadorian colleague from Oikocredit and our travel guide. We are so excited that we stop to take a group photo.
Co-operative with a high number of women
We continue down the mountain from the pass and still have plenty of time. The small city of San José de Chimbo is located in a valley in Bolívar province. Most inhabitants work in agriculture, as Lilia Jiménez tells us. She is an economist who has chaired the board of Cooperativa San José, a credit and savings co-operative, for the past 28 years. In addition to this determined and friendly lady, four other board members serve on the board - three women and one man. In total, the Oikocredit partner organization employs 136 people, 60% of whom are women.
Financial inclusion, particularly in rural areas
Cooperativa San José was founded in 1964 and currently has 130,000 members, more than half of whom are women. Credit from Oikocredit allowed branches to be opened in rural areas of Ecuador, areas where inhabitants used to have no access to financial services, reports César Capúz, a board member at the co-operative. This includes not only access to loans, but also savings accounts, and facilities to transfer money. Today, the organization works from their headquarters in San José de Chimbo, but also from six other branches in Guaranda, Chillanes, San Miguel, Montalvo, Ventanas and Quito.
Long-term agricultural loans
Oikocredit has so far provided Cooperativa San José with two loans, each with a five year term. César Capúz says that this in turn has allowed the co-operative to provide long-term loans for its members. This is particularly important in agricultural areas. Most private banks only provide short-term capital to farmers, and usually require the first payment a mere month after the loan has been taken out. However, it is often months before the harvest and the first profits that allow the loan to be paid back. “Strawberries take around three to four months, for example,” says César Capúz. Small-scale farmers belonging to the San José co-op who, for example, take out a loan for a strawberry plantation, do not have to repay their first instalment for four months.
Customer orientation and strong risk management
Many private Ecuadorian banks avoid the risks of lending money to the agricultural sector. Not the Cooperativa San José. The government regulatory body for financial institutions recently confirmed that they practice excellent risk management. In September 2015, the co-operative’s rating was improved from B+ to A-.
The goal of the co-operative is to improve the local economy, in particular within Ecuador’s rural regions. It is quite an important factor in combatting migration to the cities. The Cooperativa San José also uses micro-credit to invest in small local production companies that create jobs, such as the sweets factory run by recently married Diona Velasco and Marco Valverde. Their products include sweet, colourful baskets filled with unbelievably delicious lollies. No, they aren’t organic, but this family company employs six people under fair-work conditions.
Written by: Imke Schulte
Imke Schulte has been working in Frankfurt am Main as a consultant for public relations at Oikocredit Germany since February of 2016. Before that, the ethnologist and business economist worked in a PR Agency for financial communication and in a German-Peruvian NGO in Peru. She gained her doctorate University of Frankfurt Department of Ethnology with a thesis on sustainability in developmental cooperation.
Study Tour 2016 blogs were originally posted to the Oikocredit Germany website.