Two days with Benoît in micro-credit development

Benoît had done a volunteering of 6 months in 2010 in Formosa with Bernadette Caffier, she was leading the micro-credit project at that time. Two years ago, as Bernadette was retiring, he decided to take over the project and develop the network. The micro-credit network is called « No podemos fracasar »: « We can’t fail », an ambitious name in a country where economy is very fluctuating. 

Understanding micro-credit in one meeting 

This afternoon, it is 6 women of the neighbourhood who are meeting are meeting at Pauline and Benoît house for the second micro-credit meeting of the month. The group is called « Mujeres en marcha »: « Women on their way ». They sit, stick to the wall a poster with their group rules, another one explaining the way of working of the group and finally a huge table with the participants names, the different funds and indemnities. The meeting follow a very precise order: the secretary writes everything on the team notebook, the treasurer opens one after the other the different envelops which constitute the different funds, she counts the banknotes, report the sum on a follow-up sheet as Benoît does does on his own sheet. At the end all the participants sign the book and the follow-up sheet which will be thoroughly kept until the next meetings.


Group the « Women on their ways »

There are 3 different funds: the solidarity fund, the saving fund and the emergency fund.

-Caja solidaria- Solidarity fund: It is used as a guarantee and covers the members in case one of them can’t reimburse the indemnity at some point. When a person uses this fund, she promises to refund the next month and pay her monthly fee at the same time. This fund requires a participation of 5 to 10 pesos per months.

-Caja de ahorro – Savings bank: It is the equivalent of the internal fund. It works on the principle of a saving account with a difference: the interest rate is decided by the participants (in this group 3%). The interests are distributed between the participants at the end of the year based on their respective contributions. The more they save, the bigger the interest is.

-Caja de emergencia- Emergency fund: This fund works based on the contribution of each members (5 to 10 pesos depending on the groups). It us used in case of emergency such as medicines purchase, gaz or electricity bills…This month 2 persons are using the fund. It reflects the recent increase of energy cost of  +10 % and the bills suddenly more expensive.

And of course the main element of the micro-credit is the credit provided by the network to each participants. It works by steps:  the person borrows a first time the sum of: 1000 pesos. If she reimburse without any issues then she is authorised to borrow the sum of the second step : 1500 pesos and so on. The interest generated by this fund are going to the micro-credit network. It will be re-injected the next year in a new group or new credits. The interest rate of this fund is very high at the moment: 5%, because of the inflation of these last months.

In this group, only one woman uses micro-credit for her main professional activity: she is designer and sew some nice bags, wallets and glasses cases in imitation lather. This month she asked for a loan in order to take part to a training and learn new skills.

Travel inside Formosa province 

It is Thursday afternoon, Benoît borrowed his friend car and he is driving us on a straight road since already 2 hours. The landscape is very flat, covered with fields and punctuated by palm trees and houses. We are progressing inside Formosa province toward the cities of Pozo del Tigre, Ibarreta and Palo Santo in order to meet some other micro-credit groups. Benoît explains me how lucky we are to travel by car, because at the beginning of his project he was doing this regular trip by bus. If it is simple to join each cities from Formosa capital, it is far less easy to travel between each city by bus, so much that he even tried hitchhiking!


Micro-credit groups inside Formosa province

During the drive, Benoît tells me about a recent realisation of the network: the participation to local handcraft market. He is hoping to be able to increase the activities of the network through this channel and also to make participants realise the good opportunity that represent the network for their main professional activity. Benoît mentions to me the example of a baker in Ibarreta who started by selling her bred on the street and who step by step invested in a place and an oven. She has now a bricks-and-mortar shop. However such examples remains rare and Benoît would like to facilitate more of it. During these 2 days we meet not less than 4 groups. We are always warmly welcomed, there are sometimes conflicts within groups, still until now the participants always refund 100% of their loan.

Promoting and developing agriculture 

In the micro-credit network the majority of the participants have small shops (food, snacks, clothes) and very few participants produce things with their hands. Still there is interesting productions: honey, jam, carob flour. And Benoît tries to connect producers and sellers in order to develop their activities in the province.

It this context we meet Charli, a biology professor passionate about agriculture. He owns a mill which allows the transformation of carob fruits into flour and he works on it since few


Benoît visiting a mesquite producer

years. In Buenos Aires this flour has lot of success in organic and gluten free distribution networks. Charli explains us that the flour produced in Formosa is clearer and grainier than the one usually found in the shops. Indeed, it exists 2 under species of carob tree: one is European and the other South American and the 2 flours obtained from their fruits are different. The flour made from the European tree is precisely called carob flour, whereas the other one obtained from the South American tree is actually called mesquite. Even the taste of the 2 flours is different: the carob flour has a taste closed to cocoa and is often used as substitute in the food industry. Whereas the taste of the mesquite flour is less pronounced. When Benoît explains that is has contacted a grocery shop in Formosa capital and announces the price the manager would be ready to buy the mesquite flour, Charli answers that he expects a better price for it. He explains that mesquite flour has actually better properties than carob flour: it contains more proteins, included lysine, absent in the carob flour. There is still some work to be done by Benoît in order to develop this agriculture axis in the micro-credit network, however this meeting is promising.

Building a legal context for the mico-credit network in Argentina

The last meeting I attend before leaving Formosa is with the future members of the Argentinean association of micro-credit. Originally the network is supported by French funds. These 2 last years Benoît has raised the money needed to continue and develop the network. However, in the objective of sustaining the network and turning it into a 100% Argentinean network, Benoît started to create an Argentinean association. This way, the network could also benefit from Argentinian funds and most importantly it will have a legal structure in Argentina. Building an association in this country is not easy, to build the case Benoît has been helped by a friend of him who is a lawyer. He has delivered the file to the local authorities few weeks ago and he is waiting for their green light. Benoît ignores how long it will take to obtain it, it doesn’t stop him to start working closely with the future president and secretary of the association.

Since 2 years Benoît has led and grown the micro-credit network of Formosa. He has started important administrative procedures to secure the existence of the network in time and to open new perspectives to small producers. Still, it remains some work for his successor: Clotilde. Benoît selected her for her experience in social work. Moreover he chose to leave the position into a woman’s hands because 90% of the network members are women and during the thirteen first years of the network life they got used to open up to Bernadette. Benoît is hoping that Clotilde will win the trust of these women easily and she will continue to help them with success in their economic development.

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