Pressure To Pay

I listened as the man raised his voice, making them seem small and ashamed.

La Ceiba MFI isn’t the only money lender in the area. There are close to fifteen banks, many more employers, and a handful of other microfinances in El Progreso, Honduras. Many of these lenders do a fair amount of work with small business owners and companies, but some venture into micro loans for potential entrepreneurs.

When they do, they frequently move from the realm of business owners to the realm of low-income community members, many of whom are just trying to support their families.

Big lenders don’t always make the transition well, and by that I mean they bring their stringent business principles with them.

I’ve watched other lenders with caution. I see them zipping around the communities every other week. A loan officer will ride in on a motorcycle and sidle up to a house. They sit with the clients and talk about their payments.

More often than not, clients who work with La Ceiba (as well as their spouses) will borrow from them. When asked why, they reply that they can’t get large enough loans with La Ceiba, fast enough. Although we’ve worked to combat this trend, it still leaves a lot to be desired of the banks themselves.

When working with low-income communities, understanding and patience are crucial.

The banks hold poor families vigorously accountable like you would an established business owner. They often don’t provide families, who are struggling to end their own poverty, with more leeway, regardless of the volatility and uncertainty of their every day life.

I never had the chance to witness this up close until recently. One afternoon, I was chatting with a client in their home, when two motorcycles growled up to the front gate. A look of worry spread across the client’s face. She and her husband went to receive them.

I listened as the man raised his voice, making them seem small and ashamed. He didn’t want to hear anything they had to say and demanded payment. I could see his hand waving through leafy foliage of the fence. I sat gritting my teeth and suppressing my temper as I watched the couple divert their eyes to the ground and take their lashings.

This was a family hefting a broud of kids, a sick family member, and a dwindling job market upon their shoulders. Food supplies, school fees and medical bills kept them from canceling the installments and invited the wrath of this particular microfinance down upon them. I knew this lender had already taken a laundry list of things from the house where I sat, but it wasn’t until then that I witnessed what actual psychological pressure looked like.

The couple returned and sat beside me. The bikes droned down the street and disappeared. The wife looked like she was going to be sick.

“Look,” she said, holding out her hand, “I’m shaking.”

I’ve had the privilege of knowing this family for more than a year. I know when they’re not being straight with me and I know when they can and can’t make payments on their loans. But underneath all that, I know they’re good people with good intentions for their children. It hurt to have to watch them bleed money into the jaws of a profit-thirsty organization.

If I ever needed a reminder of why La Ceiba is the way it is, I had a stark example provided for me that day. We might do well to remember it.

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