I arrived in La Paz, Bolivia, at the beginning of April to start my two month work exchange with our Bolivian and Uruguayan office. Not only is the La Paz breath-taking because of the beautiful surrounding mountains, but also because it is the highest capital in the world.
In our local Bolivian office, Marisol Fernández, the country manager, and her team introduced me to my tasks. For the coming months I was to perform due diligence and write a report about a second loan proposal for a microfinance institution (MFI) in Sucre, Bolivia. Due diligence consists of visiting a potential or existing partner organisation to ensure they adhere to the standards set by Oikocredit before a loan is granted. This includes checking the organisation’s social, financial and environmental performance.
This particular MFI is organised as a cooperative and offers loans in the rural and urban areas of Chuquisaca and Potosi, regions in Bolivia. Enthusiastic, I dedicated my first weeks to reading the background documents, contacting the partner and planning a visit to the MFI. Preparing for due diligence can be a long and a complicated process, especially when dealing with small financial entities, so the team worked hard to help prepare me and gather the necessary information.
Sucre: the white city
I arrived at the MFI’s office in Sucre ready to perform due diligence. I was hoping that my Spanish lessons would pay off in order to fulfil my mission during those three days of immersion at the MFI. The partner is situated in the city centre, which is a UNESCO World Heritage site because of its well-maintained (all white!) colonial style structures.
I entered through the cooperative’s waiting room where I passed four cashiers and saw an environmental awareness programme playing on the television for their clients. After a meeting with the managers, I met with the social performance officer to discuss environmental, social and governance topics. The following days were dedicated to discussing their expansion strategy, any main changes since their previous Oikocredit loan, plans for the future and their financial performance.
A successful due diligence: learning, understanding and sharing
I found it particularly interesting to hear about the challenges of the partner, such as continuing to support their clients’ specific needs in the best way possible, meeting the requirements of the regulator and lenders like Oikocredit, and limiting the costs.
The managers were very friendly and patient. We shared some salteñas (savoury pastries from Bolivia) and some famous chocolate from Sucre together. The due diligence was a success and I managed to gather all the information needed to write my report.
A couple of weeks later the loan proposal was approved by Oikocredit’s regional credit committee and the loan will be disbursed soon! Hasta luego Sucre!