COASTAL, ON-LINE ISSUE 02.
By Henry G Noël
Photos: Henry G Noël
We may never know the extent of the impact resulting from the numerous and conflicting policy changes enacted by local and federal governments to justify their reaction to the 2020 pandemic called Covid-19. Regardless of whether you are a pro-government-reaction or antigovernment-reaction, one result stands clear: The economic impact has been devastating, and Ecuador's success will rest with its residents' creativity and sheer determination more than its reliance on government enactment of restorative policies.
Coastally, we continue to weather the storm of the economic devastation caused by the fear, lockdown, and conflicting information imposed on Ecuador residents by government leaders doing their best to understand and develop the best chemical formula in this world-wide experiment. This scenario is not new for Ecuadorians as historically, its residents' actions shape and shake-up government leadership into acting appropriately.
Community action groups are primary sources of information and positioned to formulate immediate action-based responses to community needs in times of conflict, strife, and uncertainty. This article is the first in a series spotlighting some of these coastal community action groups.
As businesses are returning to life, restaurants are reopening, tienda's restocking and services are once again servicing, but many of the local smaller business owners are unable to restart. The lockdown deprived them of the financial resources required to restock and supply themselves with the raw materials necessary to conduct their business. This scenario was the primary concern this writer expressed when the government ordered the lockdowns. Because the flow of income ceased, it left residents without the purchasing power to sustain a household, much less restart a business. My question was, how could these individuals survive much less get the financial resources needed to bridge the gap between remaining closed and restarting? Much to my delight, many individuals and groups of savvy residents decided not to wait on government intervention for assistance, got together, and recognizing the dilemma our communities were in, did something about it.
The Salinas Koffee Klatch is a group of local women (both of foreign origin and Ecuadorian and currently comprising over 100 members) living on the Salinas peninsula, who realized the dilemma local vendors faced because of the lockdown. Vendors have had the desire to reopen but the lack of funds required to restock. Identifying this need, the Salinas Koffee Klatch created a project called Juntos Adelante (Forward Together) to bridge the gap between business owners' desire to reopen and the resources needed to do just that.
The Salinas Koffee Klatch, after advertising on Facebook, managed to collect $6,701 from thirty-five individual donators. The donated funds were earmarked as interest-free loans offered to vendors to help them purchase needed supplies to reopen. The following is a synopsis of how the project works.
Volunteers are encouraged to talk with local residents to identify vendors in need of start-up capital. These recommended vendors are offered loans up to $200. This loan comes interest-free with a grace period of up to two months, allowing the vendor time to rebuild their business and ensure they regain an income flow before repayment begins. Monthly payments are a minimum of 10% of the loan principal. The local resident recommending the vendor is responsible for communicating the vendor's needs to the project administrator Petra Blair and explaining the project's requirements, milestones, and expectations to the vendor. Loans are based on these recommendations, and the local resident recommending the vendor is responsible for collecting the agreed-upon installment and see the project coordinator receives the payment. This process ensures the honesty of both the vendor and the recommender.
The following is a brief example:
Let’s say a vendor wishes to borrow $150 and incorporate a 2-month grace before payments start. Once repayment begins, they want to pay $30 a month for five months (the minimum payment would have been $15 per month or 10% of the loan principal). The terms are flexible and tailored to whatever the vendor feels comfortable with committing. The payment schedule is critical as the repaid funds are then re-loaned to other vendors. As of this writing, the results are remarkable.
The original $6,701 in donations and the repayment of initial loans has resulted in $8,170 being loaned to 47 different vendors, with a waiting list of recommended vendors growing daily. There have been no defaults or missed payments and several loans have been paid-in-full before the contracted repayment date.
The Salinas Koffee Klatch grabbed a serious situation and demonstrated how, with a little imagination and a lot of positive energy, a community could work together to improve dire circumstances even if unforeseen events imposed the circumstances.
The success of this project is encouraging, and anyone interested in beginning a similar project for their community or anyone that would like to donate to the Juntos Adelante Fund is encouraged to contact Petra Blair at firstname.lastname@example.org for details. Turning a community around starts with the heart, and The Salinas Koffee Klatch has heart. A big heart!