“Money Has a Lot of Power”
An Interview with Carmen Velasco

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Carmen Velasco, together with Lynne Patterson, cofounded Pro Mujer, an innovative social enterprise that provided loans, business training and health education to women living in poverty.  From 1990 to 2007 Carmen served as the country director for Pro Mujer Bolivia, building a microfinance program that served as a model for how to provide tools that allow women to move their families out of poverty. Carmen also helped developed Pro Mujer programs in Argentina, Mexico, Nicaragua, and Peru.  I am impressed with Carmen’s passion and her ability to clearly articulate the capabilities and strength of women living in poverty.  She became such an effective advocate for these women because she worked so closely with them, relying on them to teach her how she could best support them as they sought to feed their families and educate their children.  This makes Carmen one of the most grounded people I know, and one I regularly rely on to give me advice and direction.   Over the years I have had the privilege of working closely with Carmen in several initiatives focused on making sure that the way we provide financial services to people living in poverty actually improves their lives and does not leave them worse off.  Carmen is the co-chair of Truelift (a trustmark for pro-poor microfinance) and has served on the Advisory Committee of the Microcredit Summit Campaign.  She and Lynne Patterson were recognized as CNN Heroes in 2007, and in 2012 the International Alliance for Women gave Carmen the World of Difference Award.

Larry: What are your first experiences with money that you can remember?

Carmen: It’s a very interesting question.  From a very early age, I saw money as a way to discriminate between people that had money and the people that didn’t have any, the people that could do things with it and the people that couldn’t.  Through different family trips, I encountered people in Bolivia who lived in very impoverished conditions.  It made me sad because many of the children I encountered couldn’t, in their wildest dreams, do what a little girl like me was doing, traveling and enjoying life with my family.  Deep inside of me, I knew that there was something very wrong.  Something was not working and it needed to change.  There was a girl named Sabina on my grandparent’s farm.  She was a daughter of the cook.  I got so angry when she couldn’t play with me, without realizing that she had to help her mother before she could play.  So I helped her in her work so that we could go play together.  I saw a huge difference between those who didn’t need to work – me – and this little girl, she was 10 years old, that needed to work before she could go play with me.  A lot of related experiences showed me clearly that money had a lot of power.



How did that understanding play out as you went to university and started work? Is that something that you carried with you?

Yes, my childhood experiences convinced me that things needed to change and that I had to do something.  Throughout my elementary, middle and high school years, I took part in different social work activities to help those in need.  In my college years in Chile, I joined with a group of students that went to fields to collect wheat and corn to help people in the community.  We worked together with them, creating a unique bond.  This was a very strong and important experience in my life.  It showed me that is feasible to make a difference in people's lives if you work close to the people and you authentically care about their well being.

When I graduated from the university, I began to work in my private practice as a special education teacher.  After a while, I saw that my private practice did not address the underlying causes that affect the learning processes of children, especially those living in poor communities.  I wanted to understand why they were having learning problems.  While talking to their mothers, I realized that they did not recognize the power they could have in helping and being part of their own children's education.  They did not see themselves as having the capacity to be teachers for their own kids.  It was this idea that led me to more meaningful and consequential work.  I decided I wanted to do things on a larger scale working together with these women.  I felt that it was time to leave the comfort zone of my private practice and embark on a much larger and challenging adventure.

I think I had always in my mind this idea of inequality and that things could change if things were done in the proper way.  I began working with mothers, creating with them tools and methods so they could improve their knowledge and teach their kids. My huge motivation came from seeing those mothers with smiles on their faces, realizing that they could do something by themselves, for themselves, for their children and their family.

 


How did this lead into starting ProMujer?

The women with whom I was working were already gathered in "Mothers Clubs" organized by the government to distribute donated food.    It was very clear that this was not helping them.  They were falling into dependency through the perversity of donated goods.  The programs were making them believe that they couldn’t do anything for themselves.  We could see the potential of these groups, so we had several meetings with them.  We wanted to learn from them, to understand their desires and needs. They were demanding training to improve their personal skills. to protect their families' health.  We heard over and over in their testimonies that they did not want their children to have the same lives that they had.   Even more, they wanted to expand their power so that they could take advantage of the opportunities available to them and their children.  Those women gave us the blueprint for starting ProMujer.

The women told you that they wanted to do business?

Yes, they did.  In fact, that’s a very nice story.  When we began the training, we were following their guidance.  I learned by sharing with them, by talking to them, by being with them on a daily basis.  They taught me so much that I think ten years of university wouldn’t equal what I learned those days.  They told us the things that they needed to know and the skills they needed to acquire in order to support themselves.  From the beginning, we avoided using any didn't use any prepackaged training programs.  We didn't take anything already done.  We developed every single step with them, with their feedback and with their participation.  We wanted to make sure that the training we provided addressed the interests, experiences, and expectations of the women we were working with.  As we did this, they began to realize that they could make a living for themselves.  They started looking at their lives in a different way. The key to the success of those early days was their self-motivation towards change, as opposed to us telling them what to do.

They began to ask, "How can we make more money?  We don't want to be dependent on our husbands."  We heard stories of gender inequality and domestic violence.  We soon realized that these were not isolated cases, but rather this was the norm.  They had the urge to feel empowered and to have a voice, and they knew that money was a vehicle to achieve this.

None of them earned a salary, they were not employed.  Some of them were doing little things for a little money, but they didn't realize that they were making no profit on activities like knitting a sweater or making handicrafts. We prepared lessons in basic business skills with very simple workbooks that guided them through the process of building a business plan.  They did wonderful work.  Many of them could not read or write, so their kids helped them write out their business plan.  They learned how they could make a profit by selling oranges and vegetables, or by making clothes or handicrafts.

Once their business plan was set and ready to be implemented, the obvious question came to us, "How do we manage to do this.  We need money to get started."  The idea of providing a financial component didn't even cross our minds at the beginning.  In order to help them meet this need, we linked them to existing microfinance institutions in Bolivia.  They were rejected because they did not have any experience in their business and they did not have any collateral.  So we took the challenge to develop a way to give them little loans, taking bits and pieces from different methodologies, with the main one being a group lending system developed by FINCA called Village Banking.  THey group lending system felt natural to them.  They liked the idea of gathering together with their friends each week.  The group gave them confidence and support.  They had already built strong relationships with each other through the training, and the weekly meeting provided a place for ongoing coaching and learning.  With a grant from USAID, we were able to kick-start the much-needed line of credits.  It was a wonderful process because we grew with them and they grew with us.Once their business plan was set and ready to be implemented, the obvious question came to us, "How do we manage to do this.  We need money to get started."  The idea of providing a financial component didn't even cross our minds at the beginning.  In order to help them meet this need, we linked them to existing microfinance institutions in Bolivia.  They were rejected because they did not have any experience in their business and they did not have any collateral.  So we took the challenge to develop a way to give them little loans, taking bits and pieces from different methodologies, with the main one being a group lending system developed by FINCA called Village Banking.  The group lending system felt natural to them.  They liked the idea of gathering together with their friends each week.  The group gave them confidence and support.  They had already built strong relationships with each other through the training, and the weekly meeting provided a place for ongoing coaching and learning.  With a grant from USAID, we were able to kick-start the much-needed line of credits.  It was a wonderful process because we grew with them and they grew with us.



What have you learned about managing your own money from the women you worked with and how they managed their money?

It’s so different, Larry.  One of the things that struck me from the very beginning was that savings, for people with a regular high income, does not involve sacrifice.  We can set aside some money for the future while still attending to all our basic needs.   That's not true for people living in poverty.  In order to save, these women had to postpone a very urgent need, but they did in order to be prepared for the future.  They liked the fact that we required them to save as part of the lending program.  They told us many times that, for them, it was the only way they could save.

I learned that the women needed to have a mechanism where they put their money aside where they could not touch it.  They said that if that had easy access to the money, they would spend it. It applies to us also – if you want to save, don’t have access to that money.  Why should it be different for women that have much less?  We found the same thing for insurance.  If insurance was voluntary, it would be put off till later.  The fact that the savings component and the health insurance was a requirement made it easier for them to accept it.  On a daily basis, these women faced many challenges associated with living in poverty.  They did not quite understand the importance of savings and insurance because they had not experienced it.  When they began to have this compulsory payment of $1 per month for a prepaid basic insurance coverage, they used it a lot and liked it.  That's one of my learnings.  If you earn money and don't think of the future, you won't be able to handle what life throws at you.  Now one of my huge commitments is to help people become aware of the importance of preparing for the future.

Tell me about the best investment you’ve ever made.

Carmen Velasco and Lynne Patterson, founders of Pro Mujer

I think that my best investment was working with these women.  I learned and grew, not only in knowledge and skills, but they also provided me the inspiration and motivation to become a better person.  I had the opportunity to understand their urgent needs, the way they were able to cope with extremely difficult circumstances.  I have for them great respect and admiration, so I will keep on doing all I can to move things in a direction that provides sustainable benefits for them and their families. 

Whenever I feel lazy or unproductive, I think of these women that worked so hard to change their lives.  My children, they see the strength of these women and know that they can do more.  This has been a huge influence on my whole family. When I look at all the women’s lives I have been a part of, their strength and power has helped me move on.


What did your parents think?  You had a good education and you went to work in something that didn't pay very well.

I had a fantastic mother.  She was a loving wife and I deeply admire her.  My mother was fantastic mother and wife. My house was always kept very tidy and she thought of every detail.  I remember that we had aprons that she had embroidered.  We were very, very comfy.

When she saw me going to these very poor slums, she didn't want me to go.  She said, “You have children. You should pay attention to your children.”  But I think at the end she realized that this was something that made me so happy and it was so important to me that she supported me.  My father was a very compassionate and devoted Catholic.  It took him little time to understand that what I was doing was for a bigger and faultless purpose.  I was also lucky to marry a wonderful man who not only understood my determination towards this cause but also provided me with counsel and advice.  He was a pediatrician and had a degree in Public Health from Harvard.  He has always been involved in public health policies.  This proved to be extremely helpful in the development of our heal insurance and health services. had the luck to have a wonderful husband who not only understood me, but we were on the same wavelength.  He was working on health insurance in Bolivia so we talked all the time about it. This line of work forced me to be away from home for long periods of time, leaving my children. I had the blessing of having my siblings and parents living in the same block, which guaranteed a network of support for them.  It worked out very well, my three kids are excellent professionals and caring and loving daughters and son.

What struggles do you have now with making your decisions about money line up with your values?

Very good question, Larry.  Yes, I think I do have struggles in using the money in the most responsible and compassionate way.  Every time I think about those who don't have money and resources like I do, it forces me to get more involved in activities looking for alternative interventions that can make a significant and sustainable difference in their lives.

One of the things that I want to do more in the future is using all the learning that these wonderful women gave me, all the lessons that I have from them, to promote more development in similar populations.  I am committed to the idea that everybody, and especially women, should have the opportunity to use their potential and to manage their development.

I know a lot of institutions that have the same struggle, aligning their financial decisions with their values and their social objectives.  One institution that is doing a very good job in achieving this alignment is CRECER in Bolivia.  They measure the financial health and the well being of their clients with the same rigor that they measure the financial health of the institution.  They don’t break this link.  It’s one of the principles I have stood by for a very long time.  When I was asked about the financial health of the institution, but not about the financial situation of the women, I felt that they were asking only half of the questions.  They were missing the key variable of the equation, the clients.

In the microfinance sector it is common to see institutions with generous salaries for their executives and very high overhead costs.  This may prevent them from achieving their social goals.  It is a simple matter of arithmetic, when the institutions charge high interest rates and then spend a large quantity of the money on high overheads and salaries, it is likely that little money is left on the table to reinvest on programs or services aimed to improve the quality of life of their clients.  One frequent reason for this imbalance is that the ones making the decisions have not seen first hand the conditions in which these women live, how they deal with their needs, what they have to do to survive.

This practice has, time and time again, produced a lose-lose situation.  It is detrimental to the institution because the high interest rates limit the growth of their clients' businesses.  But even more importantly, it is harmful to their clients.  To turn it into a win-win relation there needs to be a commitment to maintain the balance.  A microfinance institution needs to grow based on the improvement in their clients' lives and not at their clients' expense.

This should apply to our lives as well.  I have to ask myself, does my well being come from improving the well being of others, or am I taking from others to make myself better off?

4 Comments

  1. Judy Wesy says:

    Amazing story and very informative interview!!

  2. John Alex says:

    awesome story, thanks for sharing, I fully agree that in today’s world, there are only two categories of people, financially included and financially excluded

    • Larry Reed says:

      Thanks, John Alex. I agree with your two categories, but I would put in the financially included category only those people who have access to financial products that will help make their lives better.

  3. Fernando Prado says:

    This is a real and amazing testimony of life for the Benefit of the poor and outcast. Keep going, Carmen. Your example guides many !!!

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