Just after lunch on a recent afternoon in Piñipampa, a rural village 22 miles outside of Cusco, Peru, Fausta Challco joins me as I enter the home of an artisan tile maker. She’s wearing a uniform: leather shoes, skirt, sweater, and jacket. She shakes my hand and introduces herself, panting, her brow glistening with sweat despite the crisp mountain breeze. She then turns to the tile maker and his wife and says something in Quechua. They pull up a few chairs and invite me to sit down. I’m here to interview clients of Accion microfinance partner Credinka and learn about their experience using formal financial services. Fausta is a savings promoter who will take me to meet a few clients in the afternoon. When we finish the conversation and get back in our car, I ask Fausta how she got into this line of business.
She looks at me straight in the eye and answers: “Disobedience.”
As we drive up a bumpy dirt road on the side of a hill, we leave behind a cluster of houses, their terra-cotta tile roofs ablaze in the afternoon sun. Fausta points out the car window and says, “I’m 46 and this is where I’ve spent my whole life. Almost every family here makes a living producing tiles. And that’s what my husband and I did until a few years ago, when I became a Credinka employee.”
“Doña Fausta,” her colleague says, tapping her shoulder, “tell him how you went from Credinka client to Credinka employee.”
She holds onto the front seat as the car jostles over a pothole. “All right,” she says. “We have some time.”
Her trajectory starts in November of 2005, with the arrival in Piñipampa of a man who invited Fausta to a “cup of milk” meeting — a meeting of mothers at teatime — to discuss family finances and the importance of savings. The man was a representative of the Cusco-Puno Corridor, a government-run, $30 million (USD) project funded primarily by the International Fund for Agricultural Development, with the objective of raising the incomes of the rural poor in the main road network between the cities of Cusco and Puno. A specific goal of the project was to promote savings among rural women. This took the form of incentives for opening and maintaining personal accounts at formal financial institutions in the region (Credinka in Cusco and Caja Los Andes in Puno).
Learning about savings
Fausta attended the meeting and was asked to gather a group of mothers who would commit to taking financial education classes and then opening savings accounts. When Fausta went home after that meeting, she told her husband all about the project. She was excited by the idea of learning money management skills and financial planning. She wanted to save to purchase a car. She had dreams. But he was dismissive, claiming that those meetings were scams to take people’s money. He cited the example of a bank that had gone bankrupt in the ’90s and in the process had taken away people’s money. “Plus,” he said, “those town gatherings are a breeding ground for gossip.”
Fausta pushed back. She had learned that banks were required to carry deposit insurance, so her money would be safe even if the institution went under. He did not budge. “You can go ahead,” she recounts him saying, “but if you lose the money, you’ll have to find a way to pay us back.”
Within a few days, Fausta mobilized 35 women to form a savings group. In the end, only 22 participated, many discouraged by husbands who were either jealous or skeptical about the project.
Public mistrust of banks is widespread in Peru and across Latin America, whose unstable economies have had disastrous consequences for the financial systems over the past few decades, often causing great damage to people’s financial situations.
Like many Peruvians, Fausta remembers September 6, 1988, with a mix of disbelief and sadness. On that day, at the height of an economic crisis, Economy Minister Abel Salinas addressed the nation to announce a tough anti-inflation program that doubled basic food prices and devalued the national currency. The package went into effect immediately after Salinas’s announcement. That month’s inflation rate reached 114 percent. By year-end, it soared to more than 1,000 percent. Fausta’s mother, who kept her savings inside corn sacks and under her mattress, lost everything. In a matter of days, if not hours, her hard-earned money was as good as nothing.
So when Fausta was presented with the opportunity to learn about financial education and the promise of safe savings, her heart leaped. She wasn’t going to let her husband stop her. A few short weeks after that first “cup of milk” meeting, Fausta and the 22 women formed a group and she was elected group leader. She attended the meetings religiously — often rushing to complete all of her chores and helping her husband with their tile-making activities in order to assuage his discontent with her involvement.
“Working with the group gave me confidence,” Fausta explains. “I learned to administer money and not always rely on my husband’s pocket.”
Part of her role as leader was to collect each member’s monthly contributions and travel to Credinka’s branch in Cusco to make the deposits. “I would take two buses to reach the bank, fill out slips, wait in line, and talk to the teller. It occurred to me that many of the women in my group had never seen the inside of a bank. From then on, I started bringing them every month, one by one, and showing them how to do the transactions by themselves.”
This money is mine
But after saving for several months, Fausta realized that her balance remained very small. “At the time I wanted to buy a car,” she says. “The interest I earned was barely enough to buy a loaf of bread.”
So she decided to put her money into a fixed-rate savings account for six months. She told her husband that she wanted to pool her cash with his in order to earn a higher return, but he said no. She did it anyway.
“I took the money he had at home and hopped on the bus to Cusco. When I got to the bank, I hesitated. I couldn’t believe I had just disobeyed my husband. It was already bad enough that I’d been participating in these meetings against his will, but now I might be crossing the line. But I thought and thought and then stepped into the bank and did it.”
At this point, Fausta’s eyes widen. She covers her mouth. “I was so terrified that he would find out. Every month that went by I felt a little more relieved, but I always feared, what if he asked me about his money?”
At the end of the six months, Fausta invited her husband to go to Cusco on a date. When they got there, she asked him to make a quick stop by the bank.
“What are we doing here?” he asked. “Just give me a few minutes,” she answered. “I want to show you something.” She withdrew the balance on the savings account and divided it into three piles: his initial sum, hers, and the interest earnings. “This money is yours,” she said, handing him back his original amount. “This money is mine,” she added, pointing to her initial contribution. Then, she pointed at the interest pile and said, “And this money is mine, too.”
No Faustian bargain
Unlike the medieval legend of Faust, who makes a contract with the devil in return for worldly gains, Fausta’s goals were much humbler: she wanted to improve her life and those of her children. And she thought that prudent financial management, combined with hard work and savings, could get her family there. Her husband had been a heavy drinker and sometimes was not around to help with some of the hardest tasks of their tile-making business, such as when a delivery of firewood arrived once and she had to unload the whole truck by herself. If she could purchase a vehicle, she thought, their business and quality of life would improve.
In the few years since forming that first savings group, Fausta continued to enroll women from her village and from surrounding ones into the Cusco-Puno Corridor savings project.
By 2008, Fausta heard that the project was coming to an end. She contacted the government representative who had recruited her years earlier to tell him how much she had enjoyed the experience and how important she thought that projects like these remained active.
He asked her for a phone number and told her to give him a couple of days. Eventually, she received a call from someone at Credinka inviting her to a meeting in Cusco. When she arrived at the meeting, she was presented with an employment contract.
“I thought I was going to be offered a loan to buy a car,” she says. “Never did I imagine that I would be offered a job. I got so nervous I didn’t know what to do, so I didn’t sign the contract.”
Instead, she went home and told her husband, who, to Fausta’s surprise, encouraged her to accept the offer. “Don’t be silly,” he said. “You like this so much and have put so much effort into it. Just take the job.”
So she did. “I was so proud of being offered a job,” she says. “I felt so important.”
From client to employee
Marina Orccohuarancca is Credinka’s head of microcredit and microsaving products, and Fausta’s boss. “Fausta was one of six women we hired in 2009 to raise awareness and teach rural women about the formal financial system. Until then, only small NGOs did this kind of work. It was the first time a formal, regulated financial institution reached out to this segment of the population.”
That was the case in part because those populations are geographically and culturally isolated. “Until 2002, only the security guards spoke Quechua,” Marina says. “Now, about 60 percent of the branch staff in rural areas speak Quechua.”
Credinka currently has a team of 14 women doing this work in a region that has expanded well beyond Cusco-Puno to include several more provinces in the southwestern part of the country, where development projects such as the Cusco-Puno Corridor had never reached.
Not too long after accepting the job, Fausta took a loan from her employer and purchased a truck. Her husband uses it to provide transportation services among the surrounding villages. They’ve also opened a minimarket. Their tile business is still going strong. They have even hired employees to manage production, so Fausta’s husband no longer needs to spend so many hours doing the heavy work. He now does sales and deliveries.
Fausta has flourished at Credinka. Among a long list of accomplishments, was representing Credinka at a financial innovations competition in Lima and winning. The victory was memorable because she had helped the bank improve the savings product that earned the prize; it was also her first time on an airplane. The award consisted of a vacation for two anywhere in Peru. She chose the coastal town of Trujillo and took her husband there. It was their first vacation as a couple, and his first time on an airplane too. On that trip, Fausta’s husband apologized for not having been good to her. He also thanked her for changing his life. By then, he had stopped drinking.
She has since represented Credinka on a number of projects across Peru and even in Paraguay, where she was invited to speak about the financial education work being done with rural populations in her country.
In a YouTube video posted by the Peruvian Ministry of Development and Social Inclusion, Fausta’s story of success is used to illustrate the impact of the Cusco-Puno Corridor project. In the clip, Fausta is shown making tiles with her husband, tending their store, and teaching a group of women about the banking system. They gather in the common area among a few houses, sitting on wooden chairs as Fausta lectures them, pointing to a few laminated sheets hanging from a clothesline. The image is a stark difference from the idea of a formal lesson most of us would associate with education. But given the realities of rural communities like Piñipampa — which is so similar to other villages throughout the developing world — such rudimentary methods hold the promise of making an immense difference in the lives of people who would otherwise have no chance at economic opportunity.
By the end of the project in 2008, more than 7,400 women had opened savings accounts – an extraordinary number, considering the initial goal of just 2,000. Today, Fausta not only continues to mobilize women in rural villages in the area, but she also conducts financial-skills training classes, including how to open and maintain accounts and about savings, compounding interests, financial planning, how to interpret bank statements, and more. Her three children have gone to college.
“All the sacrifices I made,” she tells me as we arrive at the next client’s house, “were validated for me when my children once said, ‘Mom, if you’ve made it this far, we’re going to have to do better than you.’”