Hello again, kind friends! Today was one of our periodic No-Internet Days here at Komak Credit Union. Our internet and telephone line is на ремонт – under repair – like just about everything else in Baku. The pace of new construction here is blistering, and the city government, awash in oil money, is more or less ripping out all the aging Soviet-era infrastructure and replacing it with brand-new work. In the five short weeks I’ve been here, there have been power cuts, gas outages, water issues, communications blackouts, and once even a small fire in the neighborhood when some construction work went wrong. Never a dull moment in this city in transition.
Almost as soon as I got to Baku last month, I jumped back into my Kiva work, which was truly a relief after so much forced downtime. I’m currently working with two of Kiva’s Azerbaijani field partners at once, Aqroinvest Credit Union and Komak Credit Union, spending two days a week at one and three days at the other.
And man, compared to my field partner in Tajikistan, these two are a world apart. Both are credit unions, first of all: financial institutions founded and run by their own members, in which profits take the form of dividends that go straight back to the poor borrowers they serve. Both are wee little things – one has 44 employees throughout all of Azerbaijan, the other only 13. Both are headquartered not in actual offices, but in remodeled residential apartments in wacky locations without so much as a sign on the door to tell their neighbors they exist. What a change of pace from IMON International, that massive, spiderlike Tajik MFI with its slick branding and its three-story marble-stair palace that stood on a hill remote from the people it served.
And my coworkers at Komak are so friendly! Every time I walk in the door, they all leap up with a hearty Sabahın xeyir! to shake my hand. “Сколько лет, сколько зим!” (“It’s been ages!”) cried one of them this morning, after I’d been out of the office for only two days. We eat our meals together at a big table every day, with one of the men cooking for everyone – as soon as I find an expat supermarket, I’m going to whip them up a big pot of pasta with garlic and balsamic vinegar, which I’m lucky is considered exotic here because it’s about the only thing I can cook. And we chat up a storm the whole time. They seem to burn with curiosity about everything American, from higher education to army service to coffeeshops to the number of stars on our flag. My Russian is getting a workout. It hurts my head a bit sometimes, but my vocabulary, and my ability to make myself understood on most topics, have improved noticeably in just three weeks. I am having a great experience, and more often than not, I find myself walking out the door with a smile.
You’ve probably gathered this, but I am really impressed by these two little MFIs, and especially by their commitment to their respective social missions. Aqroinvest was founded about ten years ago by a group of 32 Azeri farmers who pooled their money and offered loans to those who needed them; over the past decade, they’ve stayed true to their original goal of extending much-needed loans to the rural poor, as well as expanding into other vulnerable segments of the Azerbaijani population. Probably the most important of these vulnerable groups are Azerbaijan’s many internally displaced persons (IDPs) from the Nagorno-Karabakh war with Armenia – IDPs being refugees who have fled elsewhere within their own country instead of crossing an international border. Due to the war, Azerbaijan has more IDPs per capita than any other country in the world; almost one-tenth of the population had to flee their homes between 1988 and 1994, and many of them have spent twenty years living in sprawling IDP camps, often in temporary structures that hardly keep out the weather anymore.
If you’ve ever seen pictures of a refugee or IDP camp (watch this excellent video for a perspective from across the border in Armenia), you probably have a sense of just how poor the conditions can be, how little hope is in the air, and especially, how impossible it can be to find work and support your family and live. But Aqroinvest has three branches actually inside the Bilasuvar IDP camps – it’s the only MFI that works there – to enable the residents to start microenterprises and earn stable incomes. I’m going to be visiting these Bilasuvar branches as part of my borrower verification, and I have visions of turning the experience into an immersion: staying with an IDP family, roaming the camp day and night, collecting the stories of as many people as I can.
Komak, meanwhile, goes even farther: it was founded to help the IDP community of Azerbaijan, period, and the usual concerns of business are seen as very much subordinate to its social mission. It employs IDPs almost exclusively, and fully 80% of its loans are made within the IDP community. Its director, Aydin, was a manager at a wine factory in the city of Füzuli, Nagorno-Karabakh, but had to flee his home when Armenian forces occupied his hometown (one of my Kiva Fellow predecessors, Yelena Shuster, has written a post sharing Aydin’s story).
This may be a flippant way to put it, but I’m impressed with just how successfully Komak ignores opportunities to increase its profits. It’s very aware that IDPs are among the poorest people in Azerbaijan and are often in a precarious financial situation, so it tries everything it can to avoid putting undue financial stress on them. It explores every option prior to declaring a client delinquent or charging them late fees. It forgives loans for borrowers who become incapacitated or seriously ill in the middle of their repayment schedule, instead of placing the burden of repayment on their already overburdened families. It offers loans to certain IDPs with interest rates of only 6% per year – unheard of in microfinance – in an effort to enable poor rural families to create businesses in their homes instead of having to move to Baku for work. In the end, what profits it does make are generally returned back to the credit union members themselves in the form of dividends. I get the sense that Komak isn’t driven by money at all; it’s driven by its social mission, and by its desire to be a force for good in its community.
I am proud just thinking about it. I am proud to work with these two MFIs. This is what microfinance is supposed to be.
And the more I think about that, the more conflicted I feel about my previous MFI. But now we’re getting into risky territory for a blog that’s supposed to be my public face in the field, so I might want to wrap this up.