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From Peru: Microfinance, Rural Development, and Empowerment -- Is it Working?

Despite high levels of GDP per capita, over 36% of Peru’s population lives below the poverty line, approximately three million struggle in extreme poverty, and nearly half of the population living in extreme poverty resides in rural areas. Reflecting this level of social and economic inequity is the correspondingly low level of food security in these remote communities.

For this reason, I have been working for the past three weeks in the remote districts of La Mar, Huancavelica and Huanta, areas of historically low economic development and high social exclusion. These specific areas continue to suffer from the combined effects of Shining Path terrorists and counter-terrorists conflict over the past three decades, as well as contemporary narco-trafficker activity. As a result, education, capital, and infrastructure levels are low.

The scope of our project here is to two-fold: to both monitor the level of food insecurity in the region, and work with clients to collect impact reports in order to improve program efficacy of accessibility by understanding client needs at the community level.

Having just returned to the capital city of Ayacucho, in the department of Ayacucho, Peru, all I can really say it that the past three weeks of working with Freedom From Hunger and FINCA Peru have proven to be a profoundly humbling experience.

While the study and theoretical application of microfinance concepts in economic development coursework provides one with a general understanding of how microfinance operates, it is quite another experience to directly engage with recipients of these microloans and document their individual histories to understand the inter-workings of microfinance on a day-to-day basis.

What is apparent is that the provision of capital alone is not a sufficient solution to poverty. Fortunately, I have had the chance to work on capacity building and education initiatives with Freedom From Hunger, and FINCA Peru such as the Credit with Education program, in which loan recipients are provided with education on topics such as savings and investment, nutrition, and prevention of childhood illnesses.

I have about two days left in Ayacucho before heading back to Lima. From there, the team and I will be travelling to Huancayo, in the department of Junín to continue working with PRISMA and CONFIANZA for the remainder of July and duration of August.

For more photos see: http://web.me.com/bdhoy/Site/fotos/fotos.html

Please check back soon for updates!

Byron Douglas Hoy, graduate student, International Agricultural Development

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