My summer internship with EcoLogic Finance began last February and is still going strong. In between, I have met with farmers and hedge fund managers, traveled by pickup truck through five countries, and sampled more fair trade and organic products than I knew existed. Besides a lot of fun and a bit of adventure, my extended internship has complemented my coursework in ways I could not have anticipated.
It all started last winter when I met with EcoLogic Finance Founder and President William Foote ostensibly to invite him to speak on a panel for the Social Enterprise Conference. After he accepted, I asked him for a job. The organization had not planned to hire anyone for the summer but we agreed that I would begin after winter vacation on a volunteer basis. By the end of March, I had become integrated into the team and we had defined a project for my summer. The HBS Social Enterprise Initiative provided matching funding through its summer fellowship program. A few days after finals wrapped up in May, I began fulltime. Eight months later, I am still working on a number of projects with the organization: presenting loan applications to its investment committee, assessing ways to mitigate currency exchange risk as part of a project for my International Financial Management course, and participating in a strategic planning process with the staff and board.
EcoLogic Finance is a nonprofit organization based in Cambridge, MA, that uses lending and financial education to mobilize the existing entrepreneurial energy in isolated rural communities and to promote socially, and environmentally, responsible business practices. The organization manages a portfolio of loans ranging from $25,000 to $750,000 to small and medium-sized enterprises that do not meet traditional requirements to access loans from local financial institutions. Since its founding in 2000, EcoLogic Finance has lent over $45 million to 130 groups of small-scale agricultural producers in twenty countries and achieved a repayment rate in excess of 99%.
To date, the vast majority of these loans have been for working capital for cooperatives of small scale coffee growers operating in environmentally-sensitive regions of Latin America. More recently, EcoLogic Finance has begun to branch out into new regions-Africa and Asia-and new products-cacao, sesame, and a few others. My summer project was to assist with the organization’s plan to diversify its loan portfolio by investigating the market characteristics for various agricultural products and identifying new groups of small scale producers that it might support.
I spent the first month of my internship at the main EcoLogic Finance office in Cambridge, the second month at the regional office in Quetzaltenango, Guatemala, and the third month traveling through Ecuador, Peru, Bolivia, and Chile. Along the way, I visited farms, workshops, and processing plants and met with a range of producers, workers, and managers involved in everything from growing organic cotton and bananas to weaving handcrafts and painting ceramics.
My favorite parts of the summer were the field visits themselves, which proved to be as much an art as a science. I knew that it would be essential to develop a rapport with each set of hosts while simultaneously gathering as much information as possible on financial, social and environmental dimensions. Several times, I arrived at a remote rural outpost to find the entire board of directors of a cooperative, often consisting of 10-12 middle-aged farmers, awaiting me. Superficially, the barriers seemed immense-language, culture, nationality, age, and education. Nor could I answer all of their questions. But I found that these factors were relatively unimportant if I could communicate my sincerity and begin to win their trust. EcoLogic Finance aims to develop long-term partnerships with producer groups so I focused my efforts on laying the groundwork for building these future relationships.
Although my trip was intended to be investigative and preliminary, some of these relationships have formed more quickly expected. A few weeks ago, the Investment Committee of EcoLogic Finance approved a $100,000 loan for Coprobich, a cooperative of small-scale quinoa farmers in rural Ecuador that I came across while surfing the web from my desk in Cambridge in June. Quinoa, a traditional crop that was sacred to the Incas, is a small grain that is rich in protein and grown only at high altitudes in the Andean Region. The majority of Coprobich’s members are indigenous women whose husbands have migrated to the cities or abroad in search of work. Ten years ago, their average annual income was $250 and the communities where they lived had malnutrition rates of 74%.
Since then, Coprobich has formed a long-term partnership with the North American company Inca Organics, which pays a premium for the cooperative’s organic and fair-trade certified quinoa. Revenues from export have boosted family incomes to $500, while Coprobich’s policy to purchase no more than two-thirds of a farmer’s crop has helped families to increase their consumption and drop malnutrition rates to 24%. EcoLogic Finance’s loan to Coprobich will enable farmers to invest in seeds and equipment that will further increase their yields and their incomes.
I believed before coming to HBS-and even more strongly today-that market-oriented models can be not only compatible with, but also conducive to combating poverty and environmental degradation. My experience this summer with EcoLogic Finance further confirmed my desire to work between the traditional non-profit and for-profit sectors towards these dual objectives.
EcoLogic Finance is now looking for RCs who are interested in getting involved over the course of the spring semester and possibly thru the summer. Students will be paired with an EcoLogic Finance Investment Officer and will focus on Latin America, Africa, or South Asia. For more information, contact EcoLogic Finance Manager of Strategic Initiatives Kimberly Kreiling at (617) 661-5792 or kkreiling@ecologicfinance.org. And be prepared for an adventure!
