Need for Definition?

This is my first year in La Ceiba, therefore any readings on MFI’s is informative and insightful for me as a member of La Ceiba. After reading Datar’s paper, “In Microfinance, Clients must come first” I believe that La Ceiba is in between an institution-centered microfinance and a client centered microfinance. Without a true mission statement decided upon, I feel La Ceiba is in this limbo. While Datar describes an institution-centered MFI as “financial institutions for poor clients will eventually help lift these clients out of poverty”, Datar counters that a client-centered MFI, does not only offer financial support but also social services and other aspects which would more readily alleviate poverty. Both MFIs are offering their clients a way out of poverty, but what does Datar mean by getting them out of poverty and then alleviating poverty? Are we getting them out of poverty by increasing their income? Or are we looking at other aspects than just income in order to determine that someone is out of poverty?

Datar says, “Leaving poverty does not depend on repaying one’s loans…. depends on creating a successful business (41).” In class the other day, I asked “Besides the bag projects, what other ways do our clients have to generate income? How are they finding the money to repay their loans?” Nobody was fully able to answer my question. I understand the processes that were done in the past in order to jumpstart the program in order to pass out loans. Now that La Ceiba has been growing, it is important to go back to our clients and ask them how they are able to repay these loans and where the money comes from. That is why I am excited to start the constant client contact initiative. I feel it will get us on track to becoming more of a client-centered microfinance. With the constant client contact we can gather important information from each client and learn what impact the loans are having on them and better our relationships with each client.

In the past La Ceiba had clients, passed out their loans, and then have the loans repaid a very institution-centered microfinance. However, I feel that having the only goal of just increasing a client’s income is not enough. La Ceiba I would hope in the long run, alleviate poverty, better a client’s well-being. That would be an ultimate goal. And this gets to the “Real Good, Not Feel Good” article of answering the questions, “does the project have measurable and proven impacts?” and “are the impacts cost-effective?” These are all questions that must be answered as we continue to grow as an MFI and define our true mission. I guess my main question is, “How are we going to define La Ceiba as a microfinance?”