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Loans provide alternative income when remittances wane

Friday, 26 Jun 2009

By Mauricio Rosaldo, WV Mexico, and Brad Stave, VisionFund Marketing and Communications

In many parts of the world, people regularly depend on remittances (money sent from abroad) to survive.

In fact, money sent home from migrants constitutes the second largest financial inflow to many developing countries, exceeding international aid. Such is the case for places like Mexico, and for people like Sebastiana Sanchez Ocaña.

Like many Mexicans, Sebastiana’s son, Mateo, migrated to the United States from Mexico several years ago in search of a better life for his family.

“He left with the intention of earning money to buy a little piece of land, because he has a daughter and a wife and he wants the best for them,” said Sebastiana.

Mateo used to send his mother US$40 every month to support her. But with the financial crisis impeding his ability to find work, he no longer is able to send her the typical monthly finances she relied on.

Forced to search for alternative income, Sebastiana began attending a financial seminar and discovered Fundacion Realidad (FRAC), World Vision’s microfinance institution (MFI). She connected with FRAC and applied for a loan.

She then gathered her friends and neighbours to form a solidarity group called “El Tulipan,” and used the money from her loan to open a candy story and purchase several chickens and ducks.

“With the money I earn from selling candies and chickens, I can support my family. I trust the Lord that I will continue to be able to access credit and that doors will not close for me,” she said.

She added, “although for the moment Mateo cannot send me money, I do not worry about it because my business is growing little by little.”

Despite economic markets contracting and traditional forms of revenue ceasing during the financial crisis, World Vision’s MFIs are continuing to provide small loans at reasonable rates to the entrepreneurial poor.

Last year, about 1.8 million children were impacted by the work of VisionFund International (VFI) and the small loans provided to hundreds of thousands of micro entrepreneurs around the world. These small loans are not only sustaining families, but they are forever changing lives.

For more information about World Vision’s work in microfinance through VFI, please visit:visionfundinternational.org