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From Peru: Microfinance and Capacity Building Workshops

While greater consideration has recently been given to design and implementation of development initiatives that emphasize the Capability Approach as a means of poverty alleviation, no two programs are alike. Likewise, the success of one project in a particular area does not necessarily ensure the success of the similar intervention in another. The design of effective initiatives relies on an understanding of the various social, political and economic conditions of the targeted regions, both the particularities and confluence thereof, as these elements can then be evaluated in the process of adapting project parameters to most appropriately address the needs and requirements of the communities served.  
This all became apparent during my last week of work in the departments of Ayacucho and Apurímac, for it is precisely this knowledge that contributes to the efficacy of FINCA Peru’s capacity building workshops. The themes and principles covered are simple, for example: the net present value of resources, how choices made today impact the future, and how basic accounting can benefit small businesses and individuals to better inform those decisions. 
In one activity, participants are broken into two teams whose job is to fabricate paper boxes. With a loan of S./200 each team buys the raw materials from a vender (me), constructs the boxes with masking tape, and sells to a seller. The catch is, the price at which they buy and sell varies over throughout of the activity. At the end, each team must return the initial capital with interest to the lender, and the two teams are compared on how much money each made, how many boxes each produced, and the quality of those boxes.

Ultimately it is a fun opening activity that boosts the energy level in the room, and stimulates preliminary discussion of how each team organized themselves during the activity– with a division of labor and specifying production. Often what we see is one person rips tape, a couple people rip and fold the paper, one person buys raw material, and one person haggles with the buyer to negotiate the best price for their boxes.
The activity is then followed up with a discussion of how the process relates to the lives of the clients as business owners or agricultural producers. Last week, we worked mostly with avocado producers. Therefore, the components of the production cycle are explained in terms of labor, land and capital endowments, input investments such as fertilizer and irrigation, marketing decisions and product commercialization of what products are grown and where they are sold. Eventually, what is revealed is a circle whose elements combine to form the overall process of production and sale. The take home message is that decisions made in each phase influence the next stage, and that the capital generated must ultimately be reinvested for the process to sustain itself.
What makes the workshops a success and applicable to the participants is the manner in which the information is presented. It is not a monologue, it is engaging and participative, relying on the group to generate responses and advance the discussion. At the end, valuable business principles have been covered in such a way that reorients the participants thinking to pay greater attention to considerations they have already been doing subconsciously. Rather than presenting the concepts as new information, the instruction is arranged in such a way that when the final process is revealed it seems discovered rather than learned.
It seems that is can be a very effective process, and this, for me, has generated the greater interest in the pedagogy and praxis of the education component of development initiatives. In my life, I have had both incredible and horrible instructors, and I think the success of such programs relies on the brilliance of the educators involved.  
 Byron Hoy, graduate student, International Agricultural Development

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