microcredit final report

7/28/2019 Microcredit Final Report

1/30

2013

Brent Hassebrock, Morgan Rogg

and Sarah White

Team El Salvador 7

February 28, 2013

Microcredit Evaluation among

Shrimp Cooperative Participants


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Acknowledgements

We would like to extend a thank you to all those involved in the planning, organization, and

execution of this project, as well as to those community members who participated in the

interviews we conducted. The shrimp cooperative leaders interest, openness, and attention to

detail allowed us to gather valuable data that would not have been obtained if not for the time

and consideration of these producers.

We would also like to extend a special thanks to Juan Luna, Humberto Rosa, Maria Elena Vigil,

Erica, Amilcar Cruz, Leo, David Marroquin and Jose Dolores Rojas for sharing their knowledge

and for connecting us with local communities. Their efforts in providing information, mediation

and transportation were invaluable in making this project a reality. Our interpreter/translator,

Kayla Gilchrist, was a wonderful asset and went beyond her duties to fulfill the role of

communicator, facilitator, and liaison. The support and accommodation of the Coordinadora

staff, as well as of our host families, ensured that our time in the community was comfortableand filled with delicious Salvadorian food. Finally, we would like to thank the rest of Team El

Salvador and Adele Negro for their unwavering support.


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Table of Contents1.1 Executive Summary ................................................................................................................................ 3

1.2 Introduction ............................................................................................................................................. 4

2.1 Project Scope .......................................................................................................................................... 5

2.2 Methodology ........................................................................................................................................... 5

2.3 Introduction of Indicators........................................................................................................................ 7

2.4 Indicators of Success: ............................................................................................................................. 7

2.5 Explanation of Indicators ........................................................................................................................ 8

2.6 Interview Summaries .............................................................................................................................. 9

2.6.1 Fauna Silvestre ................................................................................................................................. 9

2.6.2 San Francisco ................................................................................................................................... 9

2.6.3 Salvadorea .................................................................................................................................... 10

2.6.4 Santa Rosa ...................................................................................................................................... 10

2.6.5 Sara y Ana ...................................................................................................................................... 10

2.6.6 San Hilario ..................................................................................................................................... 11

2.6.7 Dr. Armando Navarrete, Biologist ................................................................................................. 11

3.1 Evaluation ............................................................................................................................................. 12

3.2 Challenges & Lessons Learned ............................................................................................................. 16

4.1 Recommendations ................................................................................................................................. 17

4.2 Looking Forward .................................................................................................................................. 18

5.1 Appendices ............................................................................................................................................ 20

5.1.1 Appendix I: Key Informants .......................................................................................................... 20

5.1.2 Appendix II: Interview Questions for Cooperative Leaders .......................................................... 21

5.1.3 Appendix III: Interview Questions for Environmental Expert ...................................................... 23

5.1.4 Appendix IV: Relevant Photos ...................................................................................................... 25


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1.1 Executive Summary

The relationship between the Monterey Institute of International Studies and La Coordindora-Asociacin Mangle is continually strengthened and renewed each year through valuablecooperation and skills-based learning experiences among the two organizations. This year marks

the sixth year of team El Salvador project work in the Bajo Lempa and the Bay of Jiquiliscoareas, and the fourth year of collaborative projects within the framework of a Memorandum ofUnderstanding withLa Coordinadora-Asociacin Mangle.

During the three weeks of project work in the region between January 7 and January 25 of 2013,the team examined the functioning and impact of the microcredit program ofAsociacin Manglewithin the shrimp farming credit linebased on reported high rates of loan repayment in thatsector. Through interviews with local cooperative leaders and members, the microcredit teamdetermined a need to develop and define the rules and techniques of the Production andCommercialization Program for the shrimp farming sector in order to help strengthen appropriateand consistent management and monitoring of the shrimp production credit line. The team

recommended that Asociacin Mangle work with cooperatives to develop a group savings planthat would eventually lessen dependence on loans, and that the organization provide informationthrough workshops and trainings to assist cooperatives in improving their operations both interms of production and environmental sustainability.

The microcredit team held interviews for two weeks with cooperative leaders to ascertain currenteconomic, social and environmental trends within the cooperatives and their communities. Theseinterviews also enabled the team to examine the impact ofAsociacin Mangle loans as a broaderdevelopment program according to various predetermined indicators of success of within variouscategories. The specific categories and indicators will be introduced later in this report. Theinterviews provided substantial information for a more in-depth understanding of the nature and

the history of the relationship Asociacin Mangle maintains with communities and the shrimpcooperatives in the area.

The report includes a summary of each interview as well as an overall evaluation of allcooperatives interviewed based on pre-determined indicators. Given the interview data,discussions with Mangle representatives, and review of pertinent program documentation, thereport also includes recommendations for how to strengthen the microcredit program. Lastly theteam has provided suggestions for how future delegations may carry forward this project.

This collaborative experience has provided the students of the microcredit team with asubstantial professional experience that enhances aspects of their academic pursuits and career

aspirations, while also deepening their cross-cultural understandings.


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1.2 Introduction

The microcredit program ofAsociacin Mangle provides small loans to producers for the

purpose of purchasing the inputs necessary for a cycle of production. The program aims to give

producers a means of income that will ultimately improve the quality of living of the community.From an annual portfolio of $150,000 of funding that comes from the Inter-American

Foundation, this program provides low interest loans to three different production sectors in the

Jiquilisco Bay: shrimp farming, agriculture and livestock.

Mangle differentiated shrimp farming as a separate line of credit from the broader category of

agricultural loans within the last year. As such, the organization has yet to develop a microcredit

administration and regulation plan specific to this sector. Although the shrimp farming line of

credit is relatively new and unregulated, it reports excellent rates of repayment. It is for this

reason that we, in conjunction with the board members ofAsociacin Mangle, chose to use the

shrimp-farming sector as the basis for a model framework.

After meeting with the members of the board and program coordinators on January 7th, 2013,

the microcredit team started working to evaluate the success and impact of the Mangle

microcredit program among shrimp farming cooperatives in the Salinas del Potrero hub. The

teams objective was to present a framework of indicators of success that could be used for

future evaluations of other sectors under the Mangle microcredit program. To facilitate a more

comprehensive evaluation and understanding of the programs effectiveness, the team devised

indicators of success within six distinct categories, as follows:

Impact of Microcredit on Production of Shrimp Farm Cooperatives

Quality of Mangles Organizational Relations with Shrimp Farm Cooperatives

Short-Term Community Development as a Result of Microcredit

Long-Term Community Development and/or Investment as a Result of Microcredit

Sustainability of Microcredit Program

Impact of Microcredit on Environmental Sustainability of Production

The team selected these categories in order to facilitate an evaluation that goes beyond defining

the programs success as simply heightened shrimp production or excellent microcredit loan

repayment rates. This evaluation also considers the programs effects on quality of life for

shrimp cooperative members and their families; investment in production-related and

community-related infrastructure; Mangles organizational relations with community members

and an understanding of their needs; and the ability of the program to help beneficiaries become

economically independent as well as minimize the environmental impact of production. The

team hopes that this evaluation will provide a more comprehensive understanding of the


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potential success of the microcredit program as an integrated development program within the

community rather than as solely a credit system.

2.1 Project Scope

This project evaluated the functioning and management of the microcredit loan program

administered byAsociacin Mangle in the shrimp farming sector. The emphasis was on the roles

assumed by the lending program as part of a community-wide, sustainable development strategy

in the area of the Bajo Lempa and the Bay of Jiquilisco. The lending program contains three lines

of credit currently, those being: shrimp, livestock and agriculture. According to Mangle, the

lending program overall has exhibited a low reimbursement rate of less than 30%. However, the

shrimp sector boasted a much higher rate of repayment, which Asociacin Mangle viewed as a

success. The team analyzed the relationship between Asociacin Mangle and shrimp farming

cooperatives in the region that participated in the microcredit lending program. The team alsoexamined shrimp farming production and commercialization strategies to understand how

cooperatives utilized loans and to measure the economic, environmental and social sustainability

of the lending program. The team then extrapolated the data to form recommendations for

Asociacin Mangle to improve the sustainability of its microcredit lending program as a whole.

2.2 Methodology

Prior to Team El Salvadors arrival in the Bajo Lempa, the microcredit team submitted its projectproposal to the board members ofAsociacin Mangle for review. After an initial discussion of

the merits of the proposal, the team met with Production Program Coordinator, Juan Luna to

finalize the methodologies and deliverables of the project, and then created a work schedule for

the weeks that followed.

In order to gather the necessary information on cooperative success within Mangles credit

structure, the microcredit team conducted qualitative research based on three methodologies:

semi-structured interviews of cooperative leaders using open-ended questions; a review of loan

documents and scientific literature pertaining to the Bay of Jiquilisco shrimp sector; and, when

possible, the direct observation of shrimp cooperatives production practices and attitudes. JuanLuna and Humberto Rosa, Microcredit Program Coordinator, scheduled interviews with

cooperatives leaders, credit administrators, and an environmental expert in the shrimp production

sector.

In the days before the first cooperative meeting, the team developed a series of 37 interview

questions for cooperative leaders (see Appendix II) based on the indicators of success, in order to


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gather qualitative data from each cooperative and to later categorize this information by

indicator. The team then devised open-ended interview questions in order to obtain in-depth,

unbiased responses with respect to some of the impacts of the microcredit system that were not

previously considered or that were incidental effects or externalities. By allowing the

interviewees to answer the questions freely and engage in an open conversation about their

experiences in the microcredit program, the team aimed to gather more data and with greater

reliability.

When possible, team members supplemented the information they received from the interviews

with direct observations of the cooperatives operations, such as: the use of floodgates and

reservoir canals; the proximity of mangrove forests and the use of buffer zones; and the number

and state of any tanks showing signs of being affected by shrimp disease. The team had already

conducted a general literature review of the shrimp farming sector prior to its arrival in El

Salvador, then gathered additional scientific resources specific to the region after meeting with

the Mangle board. During the three weeks in-country, Humberto Rosa provided the team withavailable loan documents for shrimp cooperatives participating in the microcredit program.

The team met with representatives of six shrimping cooperatives located near the Bay of

Jiquilisco between Wednesday, January 9 and Friday, January 18, 2013. Five of the cooperatives

are located in the Salinas del Potrero hub, while the sixth, San Hilario, is located in the Salinas El

Zompopero hub. Interviews conducted at the cooperative site generally lasted between sixty and

ninety minutes. Four of the cooperatives interviewed either had previously received or currently

receive microcredit loans from Mangle: Fauna Silvestre, San Francisco, Santa Rosa, and Sara y

Ana. The other two cooperatives, La Salvadorea and San Hilario, had never received shrimp

microcredit loans from Mangle; however, both expressed interested in participating in theprogram. These cooperatives answered questions pertaining to how they perceived the

microcredit program and how they believed that a microcredit loan from Mangle would impact

their shrimp production in their cooperatives.

Additionally, the team met with Armando Navarrete, a biologist and expert on the environmental

impact of shrimp production, as well as with microcrdit coordinator Humberto Rosa.


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2.3 Introduction of Indicators

The team chose its indicators to reflect the dimensions of a successful microcredit lending

program that enables inside-out (as opposed to outside-in) community development and

improves economic development and independence as well as environmental sustainability whilealso maintaining strong relationships with communities. They are divided in the following six

categories with specific indicators for each category:

2.4 Indicators of Success:

Category I: Impact of Microcredit on Production of Shrimp Farm Cooperatives

Indicator 1: Microcredit has allowed for increased production

Indicator 2: Microcredit has allowed for investment in operational capacities

Category II: Quality of Mangles Organizational Relations with Shrimp Farm Cooperatives

Indicator 3: Cooperatives prefer Mangle microcredit loans over bank loans

Indicator 4: Cooperatives feel they have strong relations with Mangle

Indicator 5: Mangle microcredit system accommodates individual cooperative needs

Category III: Short-Term Community Development as a Result of Microcredit

Indicator 6: Microcredit boosts income for basic needs

Category IV: Long-Term Community Development and/or Investment as a Result of Microcredit

Indicator 7: Microcredit allows for improved investment in communities

Category V: Sustainability of Microcredit Program

Indicator 8: Cooperatives are not dependent on microcredit program

Indicator 9: Cooperatives feel they could not produce without microcredit in the future

Indicator 10: Cooperatives are not vulnerable to economic or natural shocks

Category VI: Impact of Microcredit on Environmental Sustainability of Production

Indicator 11: Microcredit restricts use of watershed polluting inputs

Indicator 12: Microcredit facilitates infrastructure that lessens environmental impact


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2.5 Explanation of Indicators

I. The impact of the microcredit program on production is indicative of the programs economic

sustainability for the cooperatives. Since the loans fund inputs for shrimp production, the team

assumes that if this leads to increased production and investment in operational capacities, theincome for families of producing cooperatives would increase, thus advancing their economic

stability.

II. The quality of the relationship between Asociacin Mangle and the cooperatives is

instrumental to the success ofMangles microcredit program since the program is based on an

honor system framework. Here, quality of relationship is demonstrated by cooperative preference

forMangle as a lender over a bank, the stated quality of relations by the cooperative members,

and the ability ofMangle to understand and respond to the situation of each community and the

respected challenges they face. The team evaluated the programs accessibility to cooperatives

and provided an understanding of individual cooperatives perceived quality of relationship with

the organization.

III & IV. The lending programs impact on short- as well as long-term community development

demonstrates the outcomes that access to financing is achieving or not achieving in the

cooperatives communities. It is important that short-term and long-term needs both be met and

that the satisfaction of one does not restrict the fulfillment of the other. Some short-term needs

often also represent long-term needs, such as investment in education. The team evaluated how

cooperatives utilized their incomes from production to meet short-term needs in the community

such as providing for basic needs, and how cooperatives invest their incomes from production inlong-term targets for the community, such as infrastructure, health, education, etc.

V. The ability of a microcredit program to continue to operate over time would indicate the

programs economic sustainability, which in turn affects the economic viability of individual

cooperatives. For the lending program to continue to operate in the longer term, however, it is

important that at some stage the cooperatives no longer require loans; this would therefore enable

Asociacin Mangle to devote funds elsewhere in the area as needed. To measure this, the team

evaluated whether or not cooperatives felt that they could become independent of microcredit

loans in the future. It is also important that Asociacin Mangle have the capacity to recover

loaned money. The team also evaluated how the cooperatives respond or plan to respond to

market shocks and natural disasters that could prevent them from being able to pay back their

current loans.

VI. The last indicators of success ensure that microcredit loans do not directly fund practices that

are harmful to the environment. Since shrimp farming occurs in tanks near mangrove swamps,

the team assessed the degree of use of inputs that pollute the watershed. Furthermore, certain


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production infrastructure improvements can have positive or negative impacts on the

surrounding environment; therefore, the team assessed the infrastructure improvements

cooperatives had made and the reasons for them In considering environmental sustainability, the

team recognizes the severe challenges cooperatives face in any production process. Therefore,

the team does not view sustainability as a rigid, defined, end goal, but rather a continuing process

of improvement which strengthens the resiliency, stability, and adaptability of the cooperatives.

2.6 Interview Summaries

2.6.1 Fauna Silvestre

The interview with Mr. Romeo took place at the cooperative. He stressed the significance of the

cooperatives involvement with Asociacin Mangle following the governments demobilization

of its armed forces, and stated that the cooperative has an exceptional relationship built on trustwith Asociacin Mangle, like brothers. The team discovered microcredit loans significantly

increased the cooperatives production levels, and that subsequent higher yields positively

correlated with the cooperative members abilities to support their families. Unfortunately, the

cooperative perceives significant risk of the Mancha Blanca virus lowering its yields. Mr. Romeo

did not believe that the cooperative could produce without microcredit loans and stated that

deeper and more structurally sound tanks would allow them more economic independence in the

future. The cooperative uses various chemical inputs in production alongside natural fertilizer

and employs a mono-culture system, and does not have a water and nutrient cycling system.

Following the interview, Mr. Romero gave the team a tour of the shrimp tanks.

2.6.2 San Francisco

The interview with Rogelio Arriaga took place at his home. Mancha Blanca virus currently

lowers the cooperatives production level, but Mr. Arriaga revealed that the cooperative

improved its production methods to increase yields. The cooperative uses the microcredit loans

to purchase production inputs, specifically larva and concentrated feed, and Mr. Arriaga

emphasized that if the cooperative can buy more larva, then its yields will increase. The

cooperative never used microcredit loans for infrastructure improvements, but is considering the

option and mentioned needing a loan to deepen the tanks. The cooperative worked with

Asociacin Mangle years ago and lost contact for some time, but began working with Asociacin

Mangle again last spring. Hub President Mauricio Cruz helped them regain their credibility with

the organizationafter the cooperative could not repay a microcredit loan. The cooperative enjoys

the ability to apply for multiple microcredits at once to guarantee that it acquires all the

production inputs it needs each cycle. The cooperative does not anticipate successful production


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cycles without the microcredit loans. The cooperative applies 15-15-15 fertilizer and employs a

mono-culture system, and does not have a water and nutrient cycling system.

2.6.3 Salvadorea

The interview with Jos Martinez took place at the cooperative and another cooperative memberalso participated. Half-way through the interview, the team learned that the cooperative has

interest in participating in Mangles microcredit program, but has not actually received loans to

date. The cooperative cannot currently obtain a microcredit loan because its production permit

expired. As a result, the team reframed some interview questions to identify how the cooperative

would hypothetically utilize a microcredit loan, and omitted questions that were not relevant to

the cooperative as a non-participant in the microcredit program. The cooperative wants to expand

its infrastructure, i.e. wants to improve their tanks and install reservoir canals, and also has

interest in receiving training to increase their production capacity. The cooperative uses the

various and commonplace chemical inputs in production alongside natural fertilizer and employs

a mono-culture system, and does not have a water and nutrient cycling system. Mr. Martinez

gave the team a brief tour of the shrimp tanks following the interview.

2.6.4 Santa Rosa

The interview with Jos Isabel Rivera took place at the cooperative in the company of another

cooperative member. The team discovered that the production levels were relatively low and

that overall, the strategies of the cooperative were similar to others interviewed such as selling to

intermediaries, spending microcredit on production inputs and using concentrated feed inproduction. The loans fromMangle have increased production capacity substantially and overall

the relationship between the cooperative and the lender is good. The loans have provided a

higher standard of living for the cooperative and their families, and Mr. Rivera highlighted the

need for Mangle to continue working with the cooperatives in the future. Mr. Rivera pointed out

that in order to produce independently in the future, the cooperative would need financing to

invest in infrastructure improvements. Finally, the cooperative uses the various and

commonplace chemical inputs in production alongside natural fertilizer and employs a mono-

culture system, but has a water and nutrient cycling system in place. Following the interview,

Mr. Rivera showed the team around the production ponds.

2.6.5 Sara y Ana

The interview with Mauricio Cruz took place at the Asociacin Mangle offices in San Nicolas,

where the team learned that Mr. Cruz is also president of the Salinas del Potrero hub. The

cooperative has some level of production-increasing infrastructure already in place due to


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microcredit loans, and one tank now operates independently of loans. The loans enabled the

cooperative to transition into a semi-artisanal production type. Mr. Cruz explained that the

cooperative has set production goals with specific requirements to reach a monetary goal for the

other tanks to be able to operate independently from Mangle loans in the future. These plans rely

upon more loans, which the cooperative needs for infrastructure improvements. The cooperative

currently wants loans to install pumps. The cooperative uses synthetic chemical inputs,

concentrated feed and natural inputs. Mr. Cruz closely related the cooperatives environmental

impacts and limitations to production issues, such as maintaining the optimal density of shrimp

in the ponds to avoid spreading disease while producing at a higher intensity.

2.6.6 San Hilario

The interview with Delmy Josefina Viera took place at her home in San Hilario. The cooperative

is at a higher production level than cooperatives in Salinas del Potrero and wants to install

infrastructure that both increase production and the value of the product. Ms. Viera specifically

mentioned wanting to build a warehouse and a processing plant to be able to store the product

and avoid some of the price-setting incurred by intermediaries, and to derive added value to

increase the price of the product. During the interview, the team discovered that San Hilario

cooperative does not receive loans fromAsociacin Mangle. Ms. Viera notified the team that the

cooperative seeks training from the organization and has requested a loan. The cooperative

currently receives loans from a local church, but that without any loans production could not

continue. The cooperative uses significantly less chemical inputs in production, and wants to

integrate tilapia into the production system.

2.6.7 Dr. Armando Navarrete, Biologist

The interview with Dr. Navarrete took place at his residential laboratory in San Hilario. From his

experience working with local shrimp as a biologist with ICMARES and ITCA, Dr. Navarrete

deeply understood the challenges that shrimp producers faced and gave the team an in-depth list

of these issues. The team discovered that many of the economic challenges that producers faced

directly implicated environmental sustainability shortcomings. For example, poor water quality

is a problem that can affect the production of the shrimp, since the shared water sources used to

fill the tanks are often already highly polluted. In addition, erosion caused by deforestation can

reduce the depth of the shrimp ponds, which significantly increases shrimp mortality.

Dr. Navarrete shared many valuable insights regarding ways that producers can increase

production and can improve the sustainability of their operations. He stated that the use of lime is

damaging to the environment and to production because it prevents the decomposition of organic

material in the tanks, which can affect shrimp quality and increase the incidence of disease. In

fact, he noted that MARN recommends that producers stop using the compound. In addition, Dr.

Navarrete believes that the local production of more sustainable shrimp feed would be possible


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with increased training and technical support. If local producers could manufacture a viable feed

from local sources, they would be able to reduce dependence on imported fish feed that has a

carbon footprint from transportation as well as being sourced from other fish species. Dr.

Navarrete also stated that molasses is an effective substitute for conventional fertilizers. It can

produce an equivalent algal bloom to feed shrimp and shade the tanks, while having other

important benefits: reduced organic waste materials left in the tanks, reduced incidence of

disease, and reduced eutrophication of waterways. In addition, Dr. Navarrete believes that

closed-cycle production is the best way to increase production while reducing the incidence of

disease. In the current form of production, the incidence of disease increases significantly once

intensification of production surpasses 8-10 shrimp per meter squared. Finally, Dr. Navarrete

stated that the industry would benefit from the creation of a green labeling system to differentiate

sustainably farmed shrimp from those farmed using more conventional methods.

3.1 Evaluation

Indicator 1: Microcredit has allowed for an increase in yield from production

Successful.

Among all cooperatives interviewed, all informants acknowledged a significant increase in

production due to access to microcredit. Informants stated microcredit guarantees and augments

the inputs needed for cultivation which increases their production. It is clear from the interviews

that the microcredit program is most successful in allowing cooperatives to increase their

production levels.

Indicator 2: Microcredit has allowed for investment in operational capacities

Minimally successful.

Cooperatives primarily used microcredits for production inputs rather than infrastructure or

operational technology. However, individual cooperatives reported that microcredit loans

facilitated extra profits that enabled the construction of guard houses and general maintenance of

tanks. In addition, two cooperatives within Salinas de Potrero received microcredit loans forinfrastructure. In general, cooperatives have an interest in improving their infrastructure but

prioritize obtaining microcredit loans for production inputs. This shows a trend toward short-

term solutions to ensure the success of a cycle rather than long-term investment in operations.


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Indicator 3: Cooperatives Prefer Microcredit Program to a Bank Loan

Successful.

All cooperatives interviewed prefer theAsociacinMangle microcredit program to a bank loan

due to the lower interest rates offered by the organization. Because the cooperatives do not have

collateral in the form of land, they are ineligible for a bank loan. One cooperative stated that the

organizations efficiency in loan disbursement is an advantage compared to the lengthy process

of obtaining a bank loan.Asociacin Mangle successfully provides greater credit access to the

community while quickening the process to adapt to the communitys needs.

Indicator 4: Cooperatives feel they have good relations withAsociacin Mangle

Successful.

All cooperatives interviewed stated they have good relations withAsociacin Mangle. Noted

quotes are, They are our brothers, and, We are their sons. Two out of six cooperatives

interviewed stated thatMangle providing the necessary funds and training to establish their

operations. Two cooperatives expressed positive experiences withAsociacin Mangle, but noted

that room for improvement remains. Related to the previous indicator, cooperatives enjoy a

positive relationship withMangle due to mutual trust and understanding of community

challenges. This unique relationship allows greater flexibility for repayment and strengthens

community relations.

Indicator 5:Asociacin Mangle microcredit system accommodates individual cooperative needs

Successful

Cooperatives appreciated that theAsociacin Mangle microcredit program allowed them to

apply for multiple microcredits needed for production inputs simultaneously. Individual

cooperatives also expressed gratitude for the level of flexibility and understanding for

unpredictable circumstances or difficulties during production cycles and the possibility of

refinancing. The cooperative leaders commonly considered the adaptability of the Mangles

microcredit approval and regulation system to reflect the strength of the program.

Indicator 6: Microcredits improve the ability of community members to meet basic needs

Successful

In all cooperatives currently receiving credits fromAsociacin Mangle, microcredits improved


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the ability of the community members to meet basic needs, such as food, clothing, shoes and

supplies for home gardening and animal husbandry. Cooperatives stated that the microcredit

allowed them to purchase a larger quantity of larva and concentrated feed, leading to increased

production and thus increased income.

Indicator 7: Microcredits allow for improved long-term investment in communities

Unsuccessful

A few of the cooperatives stated that the microcredit loans allowed for increased investment in

long-term community development. Those that did indicate that they used funds for long-term

development cited more consistent schooling for local children and the construction of access

roads that made it easier for buyers to reach the producers. The Sara y Ana cooperative used

microcredit loans to install a potable water system, reflecting a longer-term investment in the

community as a result of having the microcredit financing.

Indicator 8: Cooperatives are not dependent on Microcredit Program

Unsuccessful

All interviewed shrimp farming cooperatives participating in theAsociacin Mangle microcredit

program remain dependent upon microcredits for their production with the exception of one tank

in the Sara y Ana cooperative which now operates without loans which Ms. Viera attributed to

extensive infrastructure and greater economies of scale. In general, cooperatives relied heavily

upon microcredit loans to purchase every input necessary for a cycle of production, notably forlarva, feed, and lime.

Indicator 9: Cooperatives feel they could produce without microcredit in the future

Unsuccessful

Cooperatives generally doubted that future production could be sustained without microcredit

loans. However, two cooperatives supposed that economic independence could be feasible with

training and improved infrastructure. Given the general dependence on loans for production

inputs each cycle, as well as the involvement of loans in almost all future plans, cooperatives do

not envision producing independently from loans in the future.


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Indicator 10: Cooperatives are not vulnerable to economic or natural shocks

Unsuccessful

Vulnerability to the white-spot (mancha blanca) virus concerns most of the shrimp

cooperatives, as do natural disasters. Cheaper contraband shrimp from Honduras and Nicaragua

also limit the cooperatives ability to compete economically in the region. Overall, cooperatives

remain highly vulnerable to these disruptions that can hinder their abilities to repay microcredit

loans in the future.

Indicator 11: Microcredit restricts use of watershed polluting inputs

Minimally successful

Mangle gives loans specifically for lime but not for synthetic or natural fertilizer such as Melaza.All interviewed cooperatives in Salinas del Potrero apply lime and granulated chlorine, as well as

fertilizers to the tanks as this is not restricted by the microcredit program. All cooperatives

purchase imported concentrated feed usingMangle loans. Although the loans for these inputs

substantially increase production, they fund practices that ultimately pollute the watershed for

reasons explained above from the interview with Dr. Navarrete.

Indicator 12: Microcredit facilitates infrastructure that lessens environmental impact

Unsuccessful

The cooperatives in Salinas del Potrero, with the exception of Santa Rosa, do not have reservoir

canals to recycle nutrients and circulate water; this exacerbates water quality conditions and the

health of the ecosystems associated with the watershed. In all cooperatives, loans were used for

production inputs, rather than for infrastructure that lessens environmental impact. Overall, the

majority of microcredit loans fund inputs that harm the ecosystems both inside and outside the

tanks rather than circulation projects that alleviate the damage to these ecosystems.


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3.2 Challenges & Lessons Learned

As with any project, the team faced several challenges. In some cases, those challenges delayed

the projects momentum or hindered the validity/reliability of the data collected. This section is

meant to pinpoint such aspects in order to better inform future evaluation expectations and toprovide recommendations for what can be improved upon by both Team El Salvador and

Associacin Mangle in the future.

A. Interview questions should be as clear and concise as possible. The team found that the first

set of interview questions the team drafted was too complex and required additional explanation

by team members and the interpreter, which took up more time during interviews. The final draft

of interview questions was established through trial and error. While a similar strategy will likely

be required should future evaluations be developed, it should be noted that the language and the

framing of questions should be clear and simple. It is important to note that cooperative and

community members may not share the same terminology as Monterey students or may havetheir own terminology that Monterey students are not aware of. These details should be noted

and incorporated in interview questions when possible.

B. Inconsistent communication between team El Salvador and Asociacin Mangle prior to Team

El Salvadors arrival in the Bajo Lempa limited effective preparation and caused confusion

between the two parties regarding the project scope during the teams first few days in the Bajo

Lempa. Establishing clearly designated contacts in September/October would allow both parties

to better communicate so as to create a project plan that would employ the areas of competence

of Monterey Institute students and at the same time serve the needs ofAsociacin Mangle.

C. Three weeks go by quickly. Scheduling as many community meetings and interviews as

possible in the first few days helps guarantee that the group will have sufficient time to gather

necessary data and add meetings/interviews as necessary.

D. Shrimp farmers do not necessarily know the varieties of shrimp species that they cultivate or

other related technical or scientific terminology. It is best not to rely on interviews to obtain this

information, but instead, conduct research ahead of time, when possible.

E. It is essential to ask the interviewees permission before recording. Furthermore, interviewees

do not generally answer interview questions in just a few words; therefore, it is very helpful to

have the interview recording in order to listen to responses again when compiling and analyzing

data

.


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F. When requesting documentation or assistance from Asociacin Mangle, project teams should

specifically indicate the information they are seeking (documentation or an interview) and

specify their objective in doing so, in order to eliminate any misinterpretation. It may not always

be obvious to Asociacin Mangle what teams are seeking or why.

4.1 Recommendations

A. Develop a Best Practices and Techniques Document

Given that the shrimp line of credit is relatively new and that currentlyAsociacin Mangle has

no written protocol specific to the shrimping microcredit program, a priority would be to

establish a process to facilitate appropriate and consistent management and monitoring of this

line of credit. The written protocol should list specific eligibility requirements, as well as outline

and define the best practices and regulations of the production and commercialization program

for the shrimp sector. It is further recommended that the best practices outlined in this document

include measures to improve the sustainability of operations, such as reductions in the use of

chemical fertilizers and lime. We suggest using theReglamento de Credito Agropecuario as a

framework for developing this document. This document is important for establishing written

standards to effectively monitor the program.

B. Require Financial Planning for Microcredit Applicants

The team recommends thatAsociacin Mangle require producers applying for a microcredit loan

to meet with the organizations accountants prior to the disbursement of the funds in order todevelop a financial business plan. This plan would include both short-term and long-term goals

and strategies, with the final objective of reaching economic self-sufficiency. In addition, this

business strategy should include contingency plans to help producers better manage those

problems that could negatively affect production, such as flooding or disease epidemics. The

requirement would ensure that the beneficiaries of the microcredit see their operation as a

business with a future, so that every decision is made with the final objective of financial

independence in mind. The team anticipates that additional financial planning would also limit

the risk of default or refinancing.

C. Require Microcredit Beneficiaries to Participate in a Group Savings Plan

A key characteristic among all cooperatives interviewed is their dependence on microloans for

the purchase of major production inputs at each production cycle, a dependence compounded by

the general consensus that production would not be possible without access to microloans.

Considering this dependence on loans for the purchase of inputs, the lack of funding for

maintenance and infrastructure, and the high vulnerability to economic and natural shocks, the


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team believes that a group savings plan would relieve the combined financial stress that these

three factors present. The incorporation of a group savings plan could:

Encourage and facilitate improved financial planning Mitigate or alleviate losses due to epidemics or natural disasters Provide funds for general maintenance of infrastructure Provide funds for expansion and improvement of operations (such as improved

technology, infrastructure, and training)

In the case thatAsociacin Mangle does not have the capacity to develop this feature in-house, a

solution may be to add a prerequisite that the cooperatives have and contribute to a group savings

plan with a local bank. This aspect could operate on an honors system or, alternatively,

cooperatives receiving credit could show proof of having and contributing to a group savings

plan by providing bank statements with each new credit application.

D. Provide Knowledge Sharing & Training to Bolster Production

Upon interviewing biologist Armando Navarrette of the Central American Institute of

Technology working with the Business Foundation for Educational Development (ITCA-

FEPADE), it became apparent that shrimp cooperatives lack knowledge and training on how to

produce in a manner that will not only increase their yield but also minimize their impact on the

environment. This interview highlighted a number of techniques that would improve production

and lower costs.AsociacinMangle, as a creditor,should not necessarily have to stipulate how

cooperatives conduct their operation. However, given the organizationsposition and credibility

in the community, theMangle could successfully facilitate knowledge sharing. We suggest that it

bring in experts and host workshops or trainings for the benefit of both the Mangle staff and

cooperative members. The team also notes that cooperative leaders expressed an interest and

need for additional training to improve their production levels.

4.2 Looking Forward

The indicators used in this evaluation can be expanded upon to reflect the needs and the structure

of other sectors receiving microcredit. This would allow future Team El Salvador project teams

to use the same framework of indicators to assess those sectors. While the background research,

interview questions, and the dimensions of each indicator will differ between lines of credit, the

outcome of this project should offer a reliable foundation for future evaluations ofAsociacin

Mangles microcredit program; furthermore, it is hoped that future student delegations will assist

in the implementation of our recommendations.


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Lastly, the project team strongly believes that an overall assessment of the accounting structure

used in the microcredit program would be valuable, but it should be noted that this type of

evaluation will require a specialized team with training in accounting and financial management.

By increasing the involvement of MBA students in future Team El Salvador delegations, we

believe that an accurate and in-depth evaluation of the administrative and financial divisions of

the microcredit program ofAsociacin Mangle could be achieved.


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5.1 Appendices

5.1.1 Appendix I: Key Informants

Who Where Date Time

Jos Amilcar Cruz, president of

Mangle Board of Directors; Erica,

Mangle accountant; Humberto Rosa,

Coordinator of Microcredit Program

San Nicolas 1/7/2013 2:00 pm

Juan Luna, Production Program

Coordinator and liaison setting up

meetings with cooperative leaders

San Nicolas 1/8/2013 2:00 pm

Romeo, leader of Fauna Silvestre

Shrimp Cooperative

Salinas el Potrero 1/9/2013 9:00 am

Rogelio Arriaga, leader of San

Francisco Shrimp Cooperative


Juan Jos Martinez, leader of

Salvadorena Shrimp Cooperative

and Rigoberto, member


Jos Isabel Rivera, leader of Santa

Rosa Shrimp Cooperative


Mauricio Cruz, leader of Sara y Ana

Shrimp Cooperative

San Nicolas 1/16/2013 9:00 am

Dr. Armando Navarrete, biologist San Hilario 1/17/2013 9:00 am

Delmy Josefina Viera, Administrative

Manager of San Hilario Shrimp

Cooperative

San Hilario 1/18/2013 9:00 am

Humberto Rosa, Coordinator ofMangles Microcredit Program

San Nicolas 1/22/2013 9:00 am

Mangle Board of Directors and

Project Liaisons (Presentation of

Preliminary Findings)

Ciudad Romero 1/24/2013 9:00 am


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5.1.2 Appendix II: Interview Questions for Cooperative Leaders

Introduccin

Esta entrevista ser ms bien como una encuesta, porque sabemos que su tiempo es muy valioso.Por eso, nos gustara que nos d respuestas completas pero precisas para poder abordar todas las

preguntas y para no malgastar su tiempo. Antes de nada, muchas gracias por su participacin, su

ayuda en cuanto a responder estas preguntas nos permite entender mejor por qu su cooperativa

ha tenido xito en cuanto al programa de microcrdito de Asociacin Mangle para el sector

camaronero. Esperamos que esta informacin pueda ayudar a Asociacin Mangle mejorar la

gestin de su programa para serviles mejor a ustedes como participantes tanto como a la

comunidad. Como lder de la cooperativa, nos gustara que conteste usted estas preguntas de

parte de la cooperativa entera.

Preguntas de Produccin

1. Cuantos miembros tiene su cooperativa? De estos cuantos participan en el cultivo?2. Cuantos quintales de camarones se cosechan durante cada ciclo?3. Cuantos estanques utilizan ustedes actualmente para la produccin?4. De qu tamaos son los estanques?5. Cuantos ciclos hay durante un ao entero?6. Cules especies de camarn cultivan ustedes?7. Qu es el porcentaje de su cosecha que venden ustedes?8. A quin(es) venden su producto?9.

Adnde lo venden?

10.A qu precio se venden sus camarones?11.El microcrdito les ha permitido aumentar su produccin? Por cuanto ha aumentado su

produccin?

12.El microcrdito les ha permitido ampliar su operacin? En el caso que s, cmo?13.Les interesa la expansin? Si la respuesta es s, que tipo de expansin les interesa?

Preguntas de Administracin

14.Con cuanta frecuencia reciben ustedes un microcrdito? Cuantos microcrditos se leshan otorgado hasta ahora? Cundo saco usted su primer micro crdito?

15.Existen cuotas o lo pago usted en una vez?16.De qu manera invierten ustedes su micro crdito?17.Cules son los requisitos que tienen satisfacer para obtener un crdito?18.Despus de recibir el cheque de Mangle, hay algn requisito ms con lo que cumplir

para la asociacin?

19.Qu tipo de obstculos les impedira reembolsar su microcrdito?


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20.Cules son las dificultades (o retos) que enfrentan ustedes como beneficiarios y quetendra que tomar en cuenta Mangle para poder mejorar su programa de microcrdito?

(Tienen ustedes su herencias de cmo funciona mejor el programa de mangle?)

21.Cmo evala usted la experiencia que han tenido con el programa de microcrdito deMangle?

22.Cmo describira usted la relacin entre mangle y ustedes? Han tenido buenaexperiencia trabajando con Mangle?

Preguntas del Desarrollo de Comunidad

23.Cmo ha mejorado este micro crdito la vida de ustedes y/o sus familias?24.Cmo han utilizado las ganancias de la produccin de camarn?25.Han utilizado las ganancias de la cooperativa para mejorar la infraestructura de la

comunidad (por ejemplo, para construir un camino o un canal de agua)?

26.Tienen ustedes otra fuente de ingresos aparte del cultivo de camern?27.Cules son las ventajas de participar en el programa de Mangle en vez de sacar un

crdito de un banco tradicional?

Preguntas de la Sostenibilidad del programa

28.Si no hubieran sacado el microcrdito, podran, actualmente cultivar el camern (en estemomento por ejemplo)?

29.Qu es lo que les permitiran en el futuro cultivar sin ayuda financiera (por ejemplo:recursos, herramientas, tecnologa, infraestructura)?

Preguntas de la Sostenibilidad del Medio Ambiente

30.El cultivo de camarones sin hacer dao al medio ambiente, o sea, de manera sostenible,es una prioridad para los miembros de la cooperativa, o la produccin es lo principal?

31.Sabe usted de leyes ambientales que de alguna manera afecten su capacidad paracultivar el camern, ya sea de forma positiva o negativa? (Por ejemplo, hay lmites que

se imponen?)

32.Alguien viene peridicamente para monitorear la produccin?33.Qu tipo de qumicos se utilizan en el cultivo del camarn? Por ejemploCal hidratada,

Cloro granulado o Hipoclorito potsico

34.Se utilizan fertilizantes tales como Triple 15, 16-20-0, Urea granulada 46%, Melaza?35.Se utilizan concentrado? Y de qu tipo y de dnde viene?36.Siembra usted un cultivo aparte del camarn? Hay especies diferentes en un estanque?37.Qu tan lejos est(n) ubicada(n) su(s) estanque(s) de los manglares?38.Obtienen ustedes la post-larva de un laboratorio o es silvestre? Y de qu porcentaje

viene del laboratorio?

39.La cooperativa utiliza algn tipo de sistema de circulacin de nutrientes? Por ejemplo,canales reservorios? Les parece que funciona bien?


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5.1.3 Appendix III: Interview Questions for Environmental Expert

1. Cules son los impactos ambientales del cultivo de camarones en la zona de incidenciade mangle?

2. Cules son los retos ms grandes que enfrentan los camaroneros al intentar producir demanera ms sostenible?

3. Todos los camaroneros de la zona cultivan la misma especie de camern? Hayrestricciones (climticas, legales u otras) con respecto a qu tipo de especie(s) de

camarn se puede(n) cultivar?

4. Hay camaroneros en la zona que obtienen larvas silvestres, o las consiguenexclusivamente de laboratorios?

A. Cules son los efectos que el cultivo de larva de laboratorio tiene en el medioambiente?

5. Cules son los impactos ambientales de utilizar concentrado?A. De dnde proviene el concentrado que usan los camaroneros de la zona? De qu

est compuesto el concentrado?

B. Hay tipos de concentrado que son menos dainos para el medio ambiente que otros?C. Hay cooperativas en la zona que alimentan a los camarones con algo que no sea

concentradoo sea, de alimentacin natural?

6. Hay cambios que usted recomendara a los camaroneros para reducir la incidencia deenfermedades entre los camarones?

A. Es factible la incorporacin del policultivo (la incorporacin de otra especie decamern, por ejemplo)?

B. Qu tipo de infraestructura tendran que construir los camaroneros en el caso de queincorporaran el cultivo de otras especies (de camarn, o de cangrejo o tilapia)?7. Aparte de la Mancha Blanca, hay otros agentes patgenos que afectan la produccin del

camarn en la zona?

8. Qu porcentaje de la cosecha total del camarn, en un ao normal en esta zona estimarausted que se pierde por causa de enfermedades?

9. Hay ms incidencia de la Mancha Blanca entre la larva que proviene de loslaboratorios?

10.Cmo se propaga la Mancha Blanca de una cooperativa a otra? (a travs de las aguasresiduales, el uso grupal de la misma fuente de agua, en los laboratorios, etc.)

11.Cules son los efectos ambientales negativos causados por el uso de cal hidratada en losestanques de camarn?

12.Cules son los efectos ambientales negativos causados por el uso de cloro en losestanques?

13.Cules son los efectos ambientales negativos causados por el uso de abonos ofertilizantes en los estanques?

14.Cul es el propsito principal del uso de abonos/fertilizantes?


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15.Para disminuir la penetracin de la luz solar, hay otro mtodo de crear sombra en losestanques?

16.Como fuente de alimentacin para los camarones: Si se usa algas para alimentar a loscamarones, se reduce la cantidad de concentrado en los estanques?

17.El uso de abono reduce el oxgeno disuelto en los estanques (tal y como pasa con lafloracin de alga)?

18.Se ha comprobado que el uso de abono afecta de forma negativa a los ecosistemas msall de los estanques (en el manglar)?

19.Ya entendemos que no hay mucha informacin sobre las descargas producidas por lascooperativas camaroneras, pero cmo afectan estas aguas residuales las cercanas, por

ejemplo, el manglar?

20.De ser posible, de qu manera podran las cooperativas llegar a reducir el uso dequmicos o abonos?

21.Considera que el uso de abonos o desinfectantes orgnicos es una alternativa viable aluso de los qumicos sintticos? Qu alternativas se podran utilizar?

22.Segn su pericia y experiencia, qu tan eficaces son los abonos o desinfectantesorgnicos ?

23.Sabe usted cuantos camaroneros de la zona estn utilizando actualmente abonos odesinfectantes orgnicos?

24.Sabe usted si el nivel de produccin de una cooperativa de la zona se ha visto afectadode alguna manera por las aguas residuales producidas por otra cooperativa cercana?

25.Cul sera la distancia que se recomienda establecer entre una camaronera y el manglar?26.Qu tamao o tipo de zona de amortiguamiento protegera mejor la naturaleza en las

cercanad de los estanques?

27.Cundo los funcionarios del Ministerio del Medio Ambiente (MARN) monitorean lascooperativas camaroneras, qu tipo de muestras toman? Qu es lo que buscan? Hay un

nivel especfico de qumicos que no se puede exceder en el cultivo?

28.Tiene usted recomendaciones para mejorar la sostenibilidad de las operacionescamaroneras en general?

29.Usted ha visitado alguna vez las siguientes cooperativas?A. Faunas Silvestres (Salinas de Potrero)B. Salvadorea (Salinas de Potrero)C. San Francisco (Salinas de Potrero)D. Santa Rosa (Salinas de Potrero)E. Sara y Ana (Salinas de Potrero)


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5.1.4 Appendix IV: Relevant Photos

Seor Romeo demonstrating how a sluice gate works, Fauna Silvestre Cooperative,

January 9, 2013.


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Sluice gate, Fauna Silvestre Cooperative, January 9, 2013.

Tanks at La Salvadorea Cooperative, January 11, 2013.


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Sluice gate at Salvadorea Cooperative, January 11, 2013.


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Casting the net, Santa Rosa Cooperative, January 15, 2013

Shrimp harvest, Santa Rosa Cooperative, January 15, 2013.


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Shrimp harvested at Santa Rosa Cooperative, January 15, 2013.

Monterey Microcredit team with Jos Isabel Rivera, Santa Rosa Cooperative, January 15, 2013.

microcredit final report

Documents