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Students study impact of lending programs in Nicaragua

faculty-student research team
A UW-Eau Claire faculty-student research team spent three weeks in Nicaragua in January studying innovative lending programs. The students spent time with women who are using the lending program to support their businesses. The research team is pictured above with two of the local women with whom they spent significant time. The UW-Eau Claire team (from left) include Spanish instructor Amy Young and students Ian Allen and Kelsey Roets. (Submitted photo)

RELEASED: Feb. 10, 2011

EAU CLAIRE — Innovative lending programs in Nicaragua are helping women there work together more efficiently and to better manage their finances, according to a faculty-student research team from the University of Wisconsin-Eau Claire that is studying the political effects of microfinance in rural Nicaragua.

"Due to Nicaragua's volatile political nature and the upcoming presidential elections, it was difficult to collect information on formal political membership and participation," said Kelsey Roets, a senior political science and Latin American studies major from Watertown who spent three weeks in Nicaragua in January. "However, we observed that participation in group lending teaches these women skills such as group governance and finance. These skills support their community organization and expand the women's spheres of influence by developing relationships and businesses."

Kelsey Roets and local woman in Nicaragua
Kelsey Roets and local woman in Nicaragua

In their Latin American studies classes, Roets and Ian Allen, a senior political science and Spanish major from Stevens Point, learned about the history of Nicaragua and the ways in which historical precedents were responsible for the present-day challenges, such as class structure and the consequences of free trade.

"In our classes, we were introduced to microfinance, an economic-development strategy in which people living in poverty are given small loans to develop a community-based business," Roets said. "This solidarity group lending is a new phenomenon in Central America, and Teustepe, a small rural town in Nicaragua, has one of the few pilot programs. We wanted to see how it worked firsthand in Latin America."

Ian Allen
Ian Allen


 

The students connected with ENVEST, a Wisconsin-based nonprofit organization that gives money to a Nicaraguan lending institution that is supporting the pilot project in Teustepe. Through the pilot program, small (about $100) short-term loans are given to solidarity groups. The group loans encourage the participants, mainly women, to organize formally and to work with money, Allen said.

In January, Roets, Allen and UW-Eau Claire Spanish instructor Amy Young went to Nicaragua to study the political effects of microfinance on rural Nicaraguan women. They met with many of the groups involved in the pilot program to investigate how the loan programs are affecting their political participation in the communities.

"We spent three weeks in Boaco, Nicaragua, visiting different groups of women in small, rural villages," Allen said. "We spent one week studying the loan process, one week interviewing different solidarity groups and one week with individual women in order to see how their businesses worked."

While in Nicaragua, the students interviewed individuals who were receiving microloans and had them show how they used their loan to start or develop their business, said Roets, who had previously studied abroad in Costa Rica and Nicaragua.

"The purpose of the interviews was to learn why the women sought out the microloans," Roets said. "In particular, we wanted to know why they decided to participate in group lending, as most microloans are given to individuals. We also asked what they were doing with their loan, and what effects the loan has had on them. Special attention was paid to their community organization and political participation."

The students said the personal connections they made in Nicaragua were the most meaningful part of their experience.

"We were fortunate to meet many different people and hear some incredible stories," Roets said. "For example, two women with whom we really connected were Maria and Guillermina. Maria, a single mother, makes pastries over an open fire from sunup until the afternoon, when she gives them to Guillermina, her saleswoman, to sell around the town. Their microloans make this work possible as they have no disposable income to buy raw materials needed for baking. Guillermina works all day to make about $1 a day, and then uses this money to provide for herself and her nephew, who suffers from epilepsy."

Allen will use the research team's findings to write a paper about microfinance efforts in Central America. Roets will continue to investigate Nicaraguan microfinance as part of her capstone project.

Video footage taken by the researchers in Nicaragua will be edited into a film that can be used as an introduction to microfinance and a demonstration of the "chain of money" as it moves from Wisconsin to microlenders in Nicaragua and finally to the microloan recipients, Allen said, noting they also will present their work at conferences and at UW-Eau Claire's Student Research Day this spring.

The research team's project in Nicaragua was part of the UW-Eau Claire Center for International Education's International Fellows Program, which is funded through the university's Blugold Commitment initiative.

The International Fellows Program, which capitalizes on the strength and success of high-impact academic experiences offered at UW-Eau Claire, is dedicated to supporting international student-faculty collaborative research, creative activity and research service-learning.

The Blugold Commitment, approved in early 2010 by UW-Eau Claire students and the UW System Board of Regents, is a differential tuition increase of $1,200, phased in over four years, to preserve and enhance the distinctive UW-Eau Claire educational experience. Providing high-impact learning experiences — like the research team's recent Nicaragua project — for all UW-Eau Claire students is one of the goals of the Blugold Commitment.

"As an educator, I am thrilled that UW-Eau Claire has in place programs like the International Fellows program," said Young, who has previously studied and worked in Spain and Mexico. "These students were able to take a concept that they studied on campus and see it in action in Central America. That's an incredible educational experience that will benefit them long after they graduate."

For more information about their work or time in Nicaragua, contact Amy Young at 715-836-3541 or youngai@uwec.edu, Ian Allen at allenik@uwec.edu or Kelsey Roets at roetskj@uwec.edu.

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JB/JP

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