If Accion’s 53-year history were represented as a pie chart, it might arguably have only three slices: one for the first 10 years it committed to community development projects, another for the last five-plus years it has dedicated to exploring frontiers beyond microfinance, and a hefty slice in the middle representing all the years in between that Accion devoted solely to creating microfinance institutions.
A former Jesuit missionary by the name of Stephen Gross is possibly one of the most important actors in that middle period, having played an instrumental role in the creation of microfinance institutions in the Dominican Republic, Ecuador, Guatemala, Costa Rica, Bolivia, Panama, Paraguay, and Nicaragua. Those institutions currently serve millions of micro- and small businesses across Latin America and the Caribbean and have been the testing ground for innumerable products, services, and practices that are replicated by microfinance programs around the world today.
Only a handful of other early Accion employees enjoy a legacy as rich as Steve’s. From the institutions he established to the myriad courses he developed and taught to the hundreds of professionals he trained and motivated, his story is as inspiring as it is remarkable.
Jumping in with both feet
Accion recruited Steve Gross in 1977 and deployed him to the Dominican Republic. His first assignment was to develop and teach a managerial training course for farmers who were receiving loans from the Dominican Development Foundation. The 15-month course Steve developed, which met twice monthly and for which he wrote and helped illustrate some 40 study books, was initially piloted in one community but quickly spread throughout the country. In addition to teaching the courses himself, Steve trained trainers, who would then go out to teach groups of farmers. Classes covered skills such as budgeting, cost projection, prices, marketing, sales, production, loans, capitalization, bookkeeping, quality control, and so on.
Once the program was well established, Steve and his Accion colleagues pitched a new idea to the Dominican Development Foundation: to create a microcredit program in the poor urban areas of Santo Domingo. Everyone was keen, except for one small detail.
“We knew what could be improved based on our experiences in Brazil,” Steve said, in reference to adapting the lending methodology that Accion had created and had been using in that country since 1973. “We knew you could lend money and get it back, but we also knew we had to get the loan size and term down to what the clients could handle. We realized [in Brazil] that even a $300 loan to be paid over one year was too much. We had to get the loan to a smaller amount that could be paid in a shorter amount of time, thus giving the client a reachable goal and a sense of success when they paid off their debt.”
But the Dominican Development Foundation didn’t agree with Steve, so he looked for other people who would be willing to look at the Accion methodology and run with it. And he found them, of all places, on a Wednesday night in Santo Domingo, sitting at his poker table.
Pedro Jimenez was a successful businessman who had spearheaded the establishment of the first duty free zone in the Dominican Republic. Camilo Lluberes was a banker and big businessman Steve described as an idealist. When Steve explained his desire to create a microenterprise development program for their country, both men jumped in with both feet.
To get the program started, Pedro and Camilo contributed their own funds and, with them, were able to raise more money from USAID. That initial microcredit program, which employed Steve’s idea of smaller loans at shorter terms (and charged interest to cover its costs), would eventually become Banco ADEMI. Today, with 48 branches and more than 166,000 clients served with approximately $250 million in loans, ADEMI is one of the Dominican Republic’s premier financial institutions serving micro- and small enterprises.
Steve calls the events he witnessed during his tenure at Accion “evolutionary stages of growth.” The term refers to a series of assumptions, organized in chronological order, that were formulated based on past experiences building microcredit programs and that had to be corroborated before moving forward. For example, what happened with the creation of ADEMI in the Dominican Republic corroborated Accion’s fourth hypothesis: that even the poorest of the economically active were willing and able to pay for the necessary services for their own development, and that programs that worked with them could cover their own costs. Previous hypotheses proven in Brazil and Colombia included: 1) that it is possible to lend money to microenterprises and get it back, 2) that it is possible to replicate the experience of Brazil in other countries in Latin America, and 3) that it is possible to reach the poorest sector of the economically active with loans of $100 or less.
Following his work in the Dominican Republic, Steve relocated to Quito to help the Ecuadoran Development Foundation create an urban microenterprise lending program. Using a similar credit methodology to the one applied in the Dominican Republic – as well as providing microentrepreneurs with business management courses – the program flourished. Still in existence today as one of many services offered by the Ecuadoran Development Foundation, the microcredit program serves thousands of microentrepreneurs throughout Ecuador.
Then came Paraguay.
By the time Steve arrived in Asuncion in the early eighties, he had realized a few things. First, the key to establishing a successful and enduring microcredit program was to identify two fundamental players: a person who could command the attention and respect of high-profile people to head the board of directors, and another with strong leadership skills to run the daily operations of the organization.
A second realization was that those young organizations’ success depended – in a fundamental way – on the commitment and motivation of their staff. So strong was Steve’s belief in this that he designed an entire management and communication training program based on the following four principles:
- The task of creating microcredit programs is of such magnitude that only an excellent organization can adequately respond.
- An excellent organization is composed exclusively of excellent personnel.
- People can aspire to excellence to the extent that they feel that they are on the road to satisfying their personal and professional needs.
- The responsibility for creating, maintaining, and strengthening such a productive working environment must be borne by each and every person in the organization.
Based mainly on heuristic games and with a strong emphasis on the ideology of microcredit – faith in its transformative power – the training program was such a resounding success that Accion made it a part of its modus operandi, sending Steve to every partner institution to deliver the three-day classes at least twice per year.
“These courses worked very well throughout Latin America,” Steve says. “And you say, ‘Yeah, but that’s just the Latin temperament.’ But then [after Accion] I gave these courses in South Africa, Jordan, Ramallah, the West Bank, using the same exercises and the same games. And it turns out we are all alike. Human beings are all alike. And what motivates us in one part of the world motivates us in another.”
The kindness of microcredit
Strange as it may sound, Steve’s strategy for setting up a new microfinance institution was very simple. He would identify the two people for the critical roles of executive director and board president, help them settle in over one to two weeks and leave them to run the organization. He would then stay in touch with them by phone and correspondence, only coming back to deliver his management and communication courses occasionally.
“When I came to a new place with the Accion ideas,” Steve says, “most of them would look at me like I was crazy. They would say, ‘Well, that can be done in Guatemala, but not here in Colombia,’ or ‘That can be done in Colombia, but not here in Paraguay.’ And that was conventional wisdom in all these countries until we had a track record of all the previous programs.”
Juan Álvaro Munguía was the legal advisor to Nicaragua’s president, Violeta Chamorro, when he met Steve – whom he affectionately referred to as Esteban – in Managua in 1990. “Esteban talked to us about the kindness of microcredit after a terrible war, when the country was in much need of kindness and healing. So we started looking for people. Esteban said that we had to form a reconciliatory institution, meaning that we should involve Sandinistas and non-Sandinistas, but it was very hard. When I was ready to give up, Esteban would urge me to keep going and say, ‘We can do it.’”
The organization Munguía started is called Financiera FAMA, which was incorporated in April of 1991 and gave its first microloan to a solidarity group in 1992. During that first year, the organization disbursed 75 loans. In 1995, FAMA purchased its first building and christened it the Esteban Gross building. Today, FAMA is a fully regulated financial institution, having lent approximately $500 million and with a network of branches that serve the entire country. At 72, Munguía is still chairman of FAMA’s board.
Creating a network
By the mid-eighties, Accion had entered a new evolutionary stage of growth, with a new hypothesis to corroborate: a network in which participating organizations share ideas and experiences and maintain working relationships is mutually beneficial to members and promotes progress in the field of microfinance.
Cathy Quense was Accion’s chief financial and administrative officer during Steve’s tenure at Accion. “Steve had a good sense for people. He could kind of spot somebody who really had the passion and the ability to relate to Accion’s mission and vision and run with it in the field. He was a real mentor to these people and a wonderful trainer. And for us in Boston, he was the connection with the field – the staff and the institutions that later became part of the [Accion] network.”
One of those people was Carlos Herrera, executive director of Guatemalan microfinance institution Génesis Empresarial. He met Steve in 1990 when Steve went to Guatemala to deliver one of his management and communication courses. “When I first met Steve he said he worked at Accion but lived on American Airlines. He was incredibly charismatic. He taught us how to work together as a team, with exercises where the CEO had to clean the bathrooms and the janitor had to book a meeting. His classes were transformational to our staff.”
Largely based on Steve’s principles, Génesis staff gather yearly to participate in what they call their Taller de Siembra y Cosecha (sowing and harvesting workshop) – an annual two-day retreat to evaluate the past year’s results, plan for the future, and engage in team-building exercises.
By 1984, the Accion programs had evolved into a network to promote financial inclusion, social entrepreneurship, and the self-sustaining model of microfinance. Génesis is among the 26 members that currently participate in the network’s yearly meetings, provide statistical and impact data on an ongoing basis, and submit project updates and lessons learned to be shared in the network’s newsletter – which Steve named Micronoticias.
What makes life make sense
After retiring from Accion in 1999, Steve explored volunteer opportunities and found a calling in hospice care. For the past 12 years he has been working part-time, first as a volunteer and then as a chaplain with those who have terminal diagnoses and less than six months to live.
A clear line of service runs through Steve’s life.
“What I became clear on,” Steve explains, “was the fact that everybody in their growth and development has to, eventually, as they mature, become aware of the question, and interested in finding the answer to: ‘What, for me, makes life make sense?’ Service is, for me, the answer to that question. What fills my cup is serving others, because when I serve others in small ways, big ways, in any way, I’m serving my own needs. It’s all one and the same. It’s one act. It’s one attitude. It’s one way of looking at life.”