Make a loan, change a life.: Finding the 'right' microfinance partner

Lendwithcare on location in Ecuador

Entrepreneur: Leonor Zhingre

When describing to a friend recently how lendwithcare works she responded ‘so it’s a bit like an online dating website for charities?’ A comparison that I instantly felt like rejecting yet one which made me think: As life in developed countries becomes more and more digitalised, whether it be how we find love, complete daily chores like food shopping, or indeed how we give to charity, are face-to-face interactions becoming a waste of time?

After all, according to the Office for National Statistics, 12% of people in the UK now prefer to do their shopping online, with this number due to grow ‘significantly’ by 2016[1] and in early 2011 the British online dating community was pegged at 8.6 million strong[2]. And indeed this preference for ‘doing things’ online has been popular with supporters of lendwithcare. Through the lendwithcare website, lenders are not only able to see pictures, read stories and receive updates about their chosen recipients but they also become a part, if they so wish, of a lendwithcare online community in which they can share stories, motivations and experiences. As one lendwithcare lender put it “The beauty of this scheme is that if you set some money aside once, as it is repaid it can keep being re-loaned, therefore helping more people. I also love the idea of seeing real people in real places and know that I am helping them in some way.”

However, on a recent due-diligence trip to Ecuador I was starkly reminded not only of the importance but necessity of the face-to-face encounter.

Myself and Ajaz, lendwithcare’s Microfinance Advisor, arrived in Ecuador’s high capital, Quito, on the 14^th of February with one mission in mind: finding the best, and significantly the first, Latin American microfinance partner for lendwithcare. The process for finding the ‘right’ partner starts months before the trip and involves weeks of web-based research, as well as lengthy electronic correspondence between lendwithcare and country offices (in this case CARE Ecuador), lendwithcare and potential microfinance partners and lendwithcare and its UK-based partners. Correspondence that outlines criteria, seeks to review and discuss financial information and makes clear the objectives and goals of all parties involved. All so far comfortably devoid of any significant face-to-face time.

Entrepreneur: Ines

However, as we left the digi-world of the office behind and headed to Ecuador, slightly jet-lagged and constantly out of breath (Quito’s impressive altitude of 2,800 metres makes simple hill walking something of marathon proportions), the face-to-face became paramount in any, and all, decisions. By the end of day three in Ecuador we had met our partners in the country office, met three potential microfinance partners in Quito and the surrounding northern province of Imbabura and visited and spoken to a handful of microentrepreneurs - and we suddenly realised that the partner that seemed ideal on computer, in the world wide web, and through electronic mail (and I must add a very good and reputable financial institution) was not the ‘right’ one for us. How could our digi-senses have got it wrong? How? Because sometimes so much more can be gauged and understood when human beings come face-to-face, rather than screen-to-screen. And because in most relationships, at some point, some human contact is vital. After all, it is still a human being from the online supermarket who delivers your food and a real-life date that determines whether the person you found online is ‘right’ or not.

After an internal re-evaluation aided by discussions with our partners from the CARE Ecuador office and some vital financial information provided by Red Financiera Rural, a national microfinance coordinating body in Ecuador, Ajaz and I decided to trust our face-to-face conclusions and travel down to the south of Ecuador to meet Fundación FACES, a microfinance organisation who, again digitally, seemed perfect for lendwithcare.

We spent a busy few days with FACES’ staff and entrepreneurs, gauging in a way that is really only possible face-to-face, each other’s motivations, goals and expectations. To our delight we quickly realised that FACES, a non-profit non-governmental organisation (and not just a financial intermediary) believed strongly in the provision of microcredit as a way to facilitate social development and took seriously their commitment to improving the lives of marginalised and/or vulnerable social and economic groups. Importantly, the few days we spent with FACES gave us the opportunity to observe the relationship between FACES staff and their clients (lendwithcare’s potential entrepreneurs). We could observe how FACES’ loan officers were received by the clients, how they talked to one another, facial expression, touch … all things that we use daily to inform us about a person’s character. This time, it seemed like we had found the ‘right’ partner, confirmed by our face-to-face time with the FACES team.

FACES Staff

The first Ecuadorian entrepreneurs have now been uploaded to the lendwithcare website, bringing lenders in the UK and FACES’ clients screen to screen for the first time – a digi-relationship that is enjoyed immensely by both parties since it connects, directly, the lender and the recipient. A digi-relationship that, as this trip reminded me, must start with the crucial face-to-face encounter.