Why Does It Matter?
In an area of Nicaragua suffering from more than 80% unemployment, the people of Ciudad Sandino need to create jobs. Without jobs and with no social welfare, Nicaraguans are living without the basic necessities of life: decent housing, clean water, latrines, food, clothing, and medical care.
They are watching their children suffer and
die... literally.
The desire to work is not a problem. When jobs are available a long day's labor earns $3.50 a day. Meanwhile a pound of beans costs $0.70, a pound of rice $0.60, a cup of cooking oil costs $0.25, enough firewood to cook a meal costs $1 and transport to work can cost $0.65. For many, after working a long day and feeding their family only one meal, they are left with 30 cents.
When given half a chance Nicaraguans are very creative and hard workers – children wash windshields at stoplights, women make and sell tortillas out of their homes, men buy tomatoes at the market and resell them in the barrios for pennies more, women take in washing earning a nickel per piece of clothing...working, working, working and never, ever getting ahead.
In order to
get
ahead, the poor need capital: enough
money to buy a bundle of used clothing to resell, enough to buy rope
for making
hammocks, enough to buy laundry soap for taking in washing…enough to
build a
factory and purchase machinery. If the
poor walk into a bank in
So what
are we
doing to help? Since 1994, the CDCA
has funded small businesses through microenterprise
loans [see below]. Although we
believe that the poor need access to credit and that these types of
loans are
absolutely necessary, we also understand that microenterprise loans
alone are simply not enough to pull the poor out
of poverty. So we now also partner with
worker-owned cooperatives through the CDCA's Vida Fund.
What is the Vida Fund?
The CDCA
has
had a revolving loan fund to finance larger
creative initiatives over the years. Now
this fund has
expanded into a shared risk investment fund (SRIF),
newly named The Vida Fund. For many years,
farmers belonging to the agricultural
cooperative,
COPROEXNIC, have received loans for the up-front costs of planting and
raising
crops, which have been repaid after the crops have been harvested and
sold. Starting in 2007, major loans have gone out to Genesis, the
new
cooperative with 35 members that are building and developing the spinning plant.
More
funding is needed to complete the buildin
g and purchase spinning
equipment. Meanwhile, loans are also being made for the start-up
of an organic cotton
ginning plant,
which began operation in 2008.
What does it mean to share risk? The 35 members of the Genesis spinning plant have worked for over two years with no pay earning sweat equity in their cooperative. They have risked their time and energy and their families have gone with less, all with the hope that their cooperative dream will become a reality. They have risked everything they have.
Now they need investors to match that risk and invest capital in the co-op projects…patient capital with long term horizons… in other words, investors who can wait a for their return in order to allow the poor to have a fighting chance. If you have funds to invest or know someone who does, please consider sharing the risk with the poor who work so hard to have a better future.
We have a 15 year track record. Since 1994, the CDCA has received investments of more than $352,000 and has maintained 100% repayment to its investors. Investment loans receive up to 5% interest and may be in U.S. dollars or Euros. All donations are tax deductible.
Interested in helping? You can invest through loans to the Vida Fund or make a donation. Investment loans receive up to 5% interest and may be in U.S. dollars or euros. We encourage a minimum period of 5 years and minimum investment of $5,000 for Vida Fund loans, so that they can be used most effectively. We accept donations of any size. Donations enable the Vida Fund to expand while maintaining an adequate reserve to protect investors in the event that the fund should experience unexpected financial losses.
Our dream is to have a revolving fund of $1 million, which would not only see the spinning plant and accompanying gin in full operation but also help other groups with similar needs!
For More Information on The Vida Fund*
*Please Note:
The development of the Vida Fund is a work in progress. Knowledgeable
attorneys are assisting us in making sure that all agreements meet N.C.
lending guidelines. Final wording will be posted as soon as it is
available. Meanwhile, this explains the intent and purpose.
In addition to the large loans above, the CDCA has
funded
various small businesses: motorcycle repair, small neighborhood stores,
school
uniform sewing shops, and freezers for neighborhood ice vendors. Most
recently,
a small woodworking workshop, Slightly Twisted
Spoons,
has been launched. Its proceeds return to the CDCA. 
We also sell local crafts in the
How does the CDCA Microenterprise Loan Fund work? People bring proposals, budgets, and studies of their project ideas to us and if we have the funding and feel the proposal can be self sustaining then the CDCA loan is made. The signed loan contract includes collateral and payment schedules with penalties for failure to make payments. Most loans include a 5% interest charge.
As with the shared risk investment fund above, all of the investors in the CDCA's microenterprise loan fund have been repaid or have reinvested their money. Investment loans receive up to 5% interest. All donations are tax deductible. Loans may be made for one year or many.
Send your donation or loan by check or credit card. Simply let us know, if it is a loan, how long you want to invest and at what interest (up to 5%). We will send you a loan agreement contract for your signature and will send you yearly updates. All donations are tax deductible.