Leading By Example: Maria Otero

by Chris Durso

Convene Magazine, September 2008

As the head of ACCION International, María Otero has made a career of fighting poverty in the developing world — one micro business loan at a time. 

María Otero wants to help. That becomes clear within a minute of sitting down with her in her office at ACCION International, in downtown Washington, D.C. She asks if you'd like a glass of water, and when you decline, she leaves to get herself one and comes back with a glass for you - "in case you changed your mind." When it turns out you forgot your digital audio recorder, she's out of her chair again, wandering through the office, asking if anyone has one. She returns with an ACCION staff member, who sets up a recorder on the table between you and Otero before excusing herself. And, finally, with two problems solved, the interview is under way.

 Over the next hour, Otero - president and CEO of ACCION - is quietly, charmingly matter-of-fact as she traces the upward spiral of her career. A compact woman with warm hazel eyes and an elegant streak of gray in her dark hair, she didn't set out to run a pioneering nonprofit organization that in the last 10 years has made $17.4 billion in micro business loans to 6.2 million people in developing countries all over the world. Rather, she was supposed to be studying Wordsworth, Shelley, and Blake.

Born in La Paz, Bolivia, she moved to the United States with her family when she was in her teens and attended the University of Maryland, where she received a master's degree in literature, with a concentration in British Romantic poetry. Her plan was to get a doctorate and spend her life teaching and writing. But in 1973, Augusto Pinochet led a military coup in Chile and established himself as dictator. That helped draw Otero's attention back to her roots, and to the plight of the many people who were mired in poverty in her native Bolivia and throughout Latin America. "I began to realize that what I really needed to do," Otero said, "was something far more related to addressing those kinds of issues."

She broke off her literature studies, took a few economics classes, then moved back to Bolivia, where she lived with her grandmother and extended family and made her living as a children's portrait photographer - picking up on an interest she'd cultivated at the University of Maryland. She also took classes in Bolivia, and read everything she could about Latin American foreign relations. She returned to the United States a few years later and enrolled at the Johns Hopkins University Advanced School of International Studies, where she earned a master's in international relations.

From there, it was steady march through a variety of nonprofits, always with an eye on helping the poor help themselves. There was the Inter-American Foundation, which provided small grants to community organizations in Latin America; the Centre for Development and Population Activities, for which Otero traveled extensively through Asia and Africa, providing hands-on leadership training for women, especially those working in reproductive health; and, finally, ACCION, which she joined in 1986 as head of its lending program in Honduras. Three years later, she moved back to the United States to open the Boston-based organization's first-ever Washington, D.C., office, which in the beginning she operated out of the third floor of her house. In 2000, she became president and CEO of ACCION.

Today, she presides over a burgeoning nonprofit with 200 staff members, more than three million clients, and 35 partner microfinance organizations in Latin America, Asia, and Africa - plus a subsidiary, ACCION USA, that operates in the United States. She serves on the advisory councils of the Inter-American Foundation and the Federal Deposit Insurance Corporation, and is a member of the United Nations Advisors Group on Inclusive Financial Sectors. She lives in Washington with a family of spiritual (as well as blood-related) kinfolk: husband Joseph Eldridge, the chaplain at American University and himself a longtime advocate for international human rights; son Justin, 25, who co-founded the Organization for Youth Empowerment in Honduras; son David, 23, who graduated college last year and has been traveling with Justin in Latin America; and daughter Ana, 20, a college junior who is spending the fall semester studying in Bogota, Colombia.

Otero's sense of self also extends beyond her immediate family. Before the interview is over, she wants to make sure she mentions the people who have mentored her throughout her life - her mother, "who ran a household with nine children and taught me everything about keeping 12 balls up in the air, budgeting, loving, and nurturing"; Anne Ternes, her boss at the Inter-American Foundation, who "challenged me and gave me the opportunity to grow"; and Bill Burrus, who hired her at ACCION when he was executive director, and who "taught me a lot about how to manage, raise funds, think big, and maintain a sense of humor."

But you get the feeling no one had to mentor her on how to lend a helping hand ... or, luckily for Convene, share her story. What follows is an edited transcript of our interview:

How exactly does ACCION work, and why you are convinced that microfinance is the way to help people?
ACCION's mission is to help people find their way out of poverty - to give them the tools to help them leave poverty behind. One of those tools is being able to have the capital you need to run your little business. Most poor people around the world cannot be employed in the formal sector. They have to be self-employed, and "self-employed" means running a little business, from selling oranges to being able to manufacture shoes - all of it taking place in the most informal of ways, with very rudimentary tools, with very little technology, but with a lot of labor, to produce products that are going to be sold locally.

There are hundreds and hundreds of millions of people that do that around the world in order to survive, and none of them have access to capital in order to grow their business. They have to go to moneylenders to do that. The interest rates that moneylenders charge keep people poor. We always talk about the 5/6 ratio that they charge, which is that they lend you five in the morning, then you pay six in the evening. At that 10- to 15-percent interest rate a day, you can understand why people stay poor.

Microfinance really builds on that ability to make capital available to the poor. What ACCION did in the early years was break through a lot of the myths that existed about poor people - one of them being that poor people don't know how to handle credit, they're going to misuse it, and certainly they won't be able to pay back their loans. ACCION's belief was, first, let's create a way of making a loan available to poor people, with an incentive for them to pay it back - and then see if they will. After the first few years, the repayment in ACCION's work was 99 percent. This is what ACCION demonstrated. We could see that the lives of people improved because they had more income coming into their business. The demand was unbelievable. It was just all word of mouth. People were lining up. ACCION was responding to something that poor people needed, and they could take that very small amount of capital and turn it around, turn it over, and convert it into income for the family. And that income could be used for improved health, for more food, for putting a cement floor in their house, for more education.

We saw it as one entry point into addressing poverty, but not the only one at all. It's complex. It requires a lot of knowledge. The first experiments were in 1973 in Brazil. And then there was this vision of reaching scale and making loans to millions of people - and giving them a place where they can save also. That's really, really important, because they don't realize that if you're saving under your mattress, it's gone when the first relative comes along who wants something. Or you're saving in livestock - you have a pig and that's your savings - what are you going to do if you need something because your kid got sick? If you can have a bank that you trust and that is convenient, and you can have a savings account that doesn't require that you have a minimum balance, then you're also helping people not just develop the capacity to save, you're giving them a place where they can save.

If you're doing all these things, then you're creating banks. ACCION's vision from the beginning was, we're going to transform banking systems in poor countries where banks reach only 1 to 5 percent of the population. And we're going to reach people that banks have never believed could be credit-worthy, and we're going to show them that they are, and we're going to help those people move themselves up out of poverty. And that's really what ACCION is doing.

When you came to D.C. and were busy setting up shop here, did you miss being out in the field?
Absolutely. In Honduras, I spent every day with the loan officers, as they're called, who are really the young people who were trained and then would go out into the areas where people had their little business. And the "little business" is basically a corner of the dirt-floor house where a carpenter is making some piece of furniture or where a shoemaker is making shoes. In the city that I was living in, the slums were in these small hills on the outskirts of the city. We would ride up those hills and go to talk to all the people that we were working with on a regular basis.

The one-on-one with the people that we were working with helped me understand so well not only what the goal is in trying to use microfinance tools to address poverty, but it also helped me understand how hard it is to get things started in countries that are so poor - where you don't have the technology, you don't have the systems, you have bureaucracies that are enormous, you have very little human-resource capacity. So I have no illusions, as we're working now in Africa, about how quickly one can do things. I understand that the bottlenecks are really enormous.

Building capacity is really what ACCION does. I've done it from the ground up. There's no question that, when I came to Washington, being able to use that day-to-day experience, and being able to speak to what some of these bottlenecks were, allowed me to be much more persuasive in addressing some of these issues than some of the folks you have here who have never set foot in a microenterprise.

How did the president's office of ACCION end up in Washington?
When the [then-]president of ACCION decided to step down, he nominated me as the person to be considered by the board. The board looked at my candidacy very favorably, but asked me to consider moving to Boston, since that is where the headquarters are. I put that issue on the table at dinner, and my kids were all fairly well-adjusted adolescents at the time, in high school and junior high. And I remember the conversation lasted maybe 30 seconds: "You're kidding, Mom, right? You're kidding. Can you pass the potatoes?" [Laughs.]

Women perhaps more than men have to make these decisions, especially if you're a professional. When we talk about balancing work and family, "balancing" often means making some decisions that favor one over the other. My decision was that I would stay in Washington, and if the board wanted to consider me being president in Washington, then I would love it. And, at the time, the world was electronic. The world was technologically connected. So the board decided to try it out. This office was still quite a bit smaller than it is now, and I set up a good management structure in Boston, with a No. 2 running most of it, and then I would go up at least twice a month for several days. And it seemed to work.

Today, it's just not an issue. In fact, today ACCION has people working in many cities in the United States and in many countries, and we reach all of them with just a [phone] extension. And this office has grown because one of the first things that I did at ACCION was to expand it outside of Latin America, in part because of my history and because I understood that the cultures in Africa, interestingly, are not all that different from Latin America.

I'm generalizing, but at the level of interaction, people are emotive in the same way, people relate in a more personal way, people dance, people sing. All these are part of the way in which you build relationships. We started working in Africa in 2000, then expanded into India three years ago, and are now really a global organization working throughout the world.

As much as there are commonalities, do you have to tailor your approach from country to country?
Of course. The reason we were so successful in Latin America is because we had so many Latins involved - Latin Americans like myself who could "read" both cultures. That's what we're doing. We build capacity by hiring people in those countries.

How do you operate differently in Africa or Asia?
One of the difficulties in Africa is that, first, there are fewer human-capital resources. Finding people to do the work, especially at the manager level, is hard. And, second, you have to build institutions from the bottom up, with much more work than you would in Latin America right now. So, building capacity in Africa is really important. We're creating a training center in our regional office, which is in Ghana. Part of our effort is to train Africans in doing this work and have them be the ones that are going to be running the organizations there.

How does an organization like ACCION measure its success?
Our mission is to help people move themselves out of poverty. So, the bottom line is, how many clients, how many people, are we reaching with financial services that are provided in a quality fashion and in an ongoing fashion? Which is the other reason we create banks, because if we had a nonprofit and it made loans for five years and then it ran out of money and couldn't get any more donations, what happens to the carpenter? What happens to the woman who continues to need capital to grow her business? We measure our work by the number of people we reach. We measure ourselves also by how valid and strong the lending institutions - we call them microfinance banks - are, because that's a measure of how long they will last. Everything else works toward that.

Do you still get into the field?
Oh, yeah, quite a bit. Whenever I do, I make a real effort to go visit clients. All those visits are very informative. For example, I will go to our partner in Peru and I will say, "I would like to meet a group of women that have been borrowing, that have had a business now for 10 years, or 15 years." And I will end up sitting with four or five women who have little stands in a marketplace and who have been doing that all their lives. And they have been borrowing from ACCION's partner over that period of time. I sit down and have a conversation about what having a steady source of income has meant for their vulnerability, for their ability to plan for their family, for their ability to educate their children. And I learn so much from them - how we should be doing what we're doing, and where what we're doing makes a difference and where it doesn't … and then still what bottlenecks and what adversity people who are living on the edge face, which is enormous. That's what instructs all the work that we do.