United They Stand: The First Steps in Micro-finance

By Ward Lassoe / KF-18 / Armenia

Recently, I had the chance to experience micro-finance at its very earliest stages. It started with a visit to some Kiva borrowers in the one of the poorer regions of Armenia. We were in the northeastern corner of the country, near the border with Azerbaijan.

This farmer and others got loans through Nor Horizon, one of Kiva’s partners in Armenia, but there are many other local farmers who are not financially stable enough to qualify for a Kiva loan. That may change soon thanks to a new initiative where local farmers are banding together to improve their overall economic situation.

One of them is Vahran Asatryan. He’s been a farmer for about 15 years, growing peaches, figs, and plums.

In the past, he’s had to sell all his fruit as soon as it was harvested because he had nowhere to store it. As a result, he got the lowest prices for his crops because he was selling when supply was at its highest.

That will change this year because Vahran has joined with more than 40 other farmers in his region to form the Lchkadzor-Ayrum Cooperative. Together, the cooperative raised enough money to convert an old building into a cold storage facility.

It’s empty now, but the space will fill up quickly as the harvest begins. This new facility means that Vahram and other farmers can now store the bulk of their crop until later in the year when market prices are higher.

This cooperative is one of ten that have formed around Armenia since 2010 as part of an initiative by Oxfam.

Forming a cooperative is not easy. One key is a strong leader. In this case, it’s the former mayor of the town, and I quickly learned that his enthusiasm for the project is contagious.

These cooperatives are also taking the first small steps into micro-finance thanks to the Horizon Fund (the parent company of Nor Horizon). The individual loans are just a few hundred dollars at this point, but it’s a start. I was there when farmers came in to make their monthly payment.

So far, the program is going well. There is no formal plan to include the cooperatives in the Kiva lending program, but Nor Horizon hopes to eventually move in that direction. The farmers may end up borrowing as a group or individually.

This visit was a great opportunity to see the power of micro-finance at its very earliest stages. Keep an eye out for these men and women on Kiva down the road.

Ward Lassoe is Kiva Fellow working in Armenia this summer with two Kiva partners, Nor Horizon and SEF International. Join the leading team for Armenia on Kiva.org.