Archive for June, 2011

By Emily Winans

Juntas are an informal way for people to get “large” sums of money in Peru.  Several of the entrepreneurs we work with organize juntas and many others participate in them.  For some, it seems to be a way to save money when they do not have a lot of willpower to do it on their own.  For others, it is essentially a loan that is paid back without interest.  The basic concept of a junta is that you pay a certain quantity daily, weekly, or monthly.  When it is your turn, you get the entire amount invested.  Everyone puts in the same amount. 

There are three kinds of juntas.  The first kind is similar to a lottery.  Let’s say the junta requires a weekly payment of 100 Soles (the local currency) for 10 weeks.    Over a period of 10 weeks your contribution will be 1000 Soles.  Each week everyone in the junta gets together for a drawing.  The person who is selected at random, collects their 1000 Soles that week.  If it is the first week, the person will continue to pay the 100 Soles per week for the following 9 weeks.  For that person the junta acts more like a loan.

There is also a fixed number system.  Each person in the junta is given a number by the person who organizes it.  The organizer, of course, gets number one.  If it is, for example, a daily junta of one Sol for 30 days, each person will collect the thirty Soles in number order.  If your friend is the organizer, you can probably get one of the lower numbers.  You can swap numbers with someone for the right price if you need the cash sooner than someone else.

 The third type of junta is primarily based on need.  Each week, people in the junta write down the percentage loss they are willing to take on the total amount based on their current need for cash.  The person who notes the largest discount takes the cash.

 Juntas are even used to purchase vehicles!  The Association of Professional Taxi Drivers organizes a junta that lasts for three years.  One-hundred participants enter the junta with a $25 sign-up fee and $45 per week.  The organizer is an individual with access to a line of credit or savings that can be used to purchase vehicles.  In the first week, the organizer will earn $7,000, which is combined with the individual’s line of credit or personal savings to purchase five vehicles.  During the first week, the five vehicles are given out through a lottery system.  Once a person has a vehicle, they must pay $85 per week instead of $45.  The taxi drivers benefit from the junta because the cost to rent a car is so high.  Taxi drivers who do not own their own vehicle pay about $120 per week to rent.  It is somewhat similar to a rent to own payment plan. 

 The list goes on in terms of variations of juntas.  They are commonly used by entrepreneurs with businesses of all sizes to access capital in Peru.

By Jacquelyn Hunter
MBA Candidate, 2012

Our first day of work as Proyecto Salta MBA Interns in Lima started with an orientation at the office in San Isidro.  While reviewing the important information we would need in order to start our work the next day, we discussed our schedule for the first week.  We would each be working with eight women entrepreneurs for the first month of the project, each with their own unique business.  My first group would include a variety of businesses such as bodegas, a manufacturer of backpacks, and an evening gown designer.  The only business I wasn’t quite sure about was my first appointment, an entrepreneur that was listed as having a “cubre-artefactos” business.  “Hmmmm,” I thought, “what exactly is a cubre-artefacto?”

The direct translation of cubre-artefacto is appliance cover, but unfortunately I didn’t have too much experience with the appliance cover industry.  I have never owned an appliance cover and probably never will, or so I thought.   But thinking back to my experience living in Belize as a Peace Corps volunteer, I did recall seeing some people covering important appliances or electronics in their homes, such as a microwave or stereo, with decorative fabric in order to protect it from the dusty dirt roads in the village. Usually the appliance covers used in Belize were old scraps of fabric that were draped over the appliance, but little did I know that with some creativity and quality craftsmanship a beautiful and funky appliance cover could be just what people need to spruce up their homes while at the same time gaining functional benefits such as protection from dust and damage.

Miriam is an artist, as I could tell from her passion for designing new products and her creatively painted one room home in San Juan de Lurigancho. Mariam learned to sew about 15 years ago and has developed her own products of appliance covers, furniture covers, dolls, curtains, and home accessories.  My favorite products are the pig and duck-in-a-dress blender covers (called “la chanchita” and “la patita”) and the matching kitchen towel holders.  Miriam has a small operation of three sewing machines that she bought with a micro-finance loan and she sells about 850 soles (roughly 300 dollars) worth of her products per month through direct sales to customers and selling her products at three local stores.  Miriam told me her products sell quickly and market stall owners in Lima Centro market had offered to sell her products, but that alone it was difficult for her to produce a large enough quantity to be able to sell in those markets.  Miriam’s dream is to build a workshop and store for her products by constructing a second floor on her home.  In order to build the workshop, she will need to pay off her current loan, increase her sales and take an additional loan to pay for the building supplies.  Miriam’s husband is very supportive and is willing to build the workshop for her if she is able grow her business and support the investment.
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By Amanda Roberson
MBA Candidate, 2012 

“If you want to be happy, you don’t have to go out and search for happiness … just look for it, and you will find it in yourself.” This pearl of wisdom is among many Maria Frisancho wants to share with her fellow Peruvian women entrepreneurs. The owner of a successful children’s shoe business in a downtown Lima market, she started with little and grew her enterprise through relentless hard work and constant faith in her abilities. During our final Salta training session together, we sat at a table in the market’s cafeteria and she told me her story in hopes of inspiring others.

Like many Limeños (inhabitants of Lima), Maria’s family is from what Peruvians call the provinces, essentially the rest of the country outside of the capital. They moved to Lima when Maria was young. The oldest of nine children, Maria helped her parents and watched them run a meat business. Although she always had a latent entrepreneurial spirit, the meat business didn’t call out to her.

“I didn’t like to get my hands dirty,” she said. “What I liked was reading. I was always reading some kind of literature.” 

After finishing primary and secondary school, Maria’s studious nature led her to secretarial school, where she trained to be a legal secretary in hopes of later becoming a lawyer. She wanted to be able to protect her mother, who remarried a man who became abusive, she explained. Maria’s plan was cut short when she got married and had two children. Then along came the shoe business out of happenstance. Maria’s brother had a stall selling shoes in downtown Lima, and one day he asked her to help out. Immediately, the business grabbed her. 

“I didn’t know that I had it in me to sell,” she said. “I never knew that I had all that energy saved up inside of me.”
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One year ago today, partners from the public, private and nonprofit sectors launched a four-year campaign to empower 100,000 women entrepreneurs in Peru through business education. The campaign, called Proyecto Salta, includes a three-hour seminar that covers basic concepts such as marketing, negotiation, cash flow management, networking and personal development. Concepts are reinforced through a telenovela created specifically for the Salta training at community centers from Lima to Puno (near Lake Titicaca on the Bolivian border). Overall, 30,661 women participated in the free seminar during the first year. Thunderbird School of Global Management helped design the seminar in collaboration with professional development firm Aprenda, a local company based in Lima. In May 2011, Thunderbird also sent a team of five MBA students to Peru to work one-on-one with Proyecto Salta participants, providing an extra layer of support to the women’s education and business growth. Learn more in this Thunderbird Knowledge Network video:

By Craig Brammer
MBA Candidate, 2011

We all know the phrase “Looks can be deceiving.” If one were to look upon the hillside shantytown of San Juan De Lurigancho in Lima Perú they might make certain assumptions about the education level, ambition, and global mindset of its inhabitants. In the case of Flor Hurtado those assumptions would likely be dead wrong.

Flor Hurtado is a small business owner and participant in the Salta program that lives near the top of this rugged hillside. Flor is a bilingual world traveler who likes to read literature such as The Kite Runner in her spare time. Flor is fluent in German and lived and attended school in Germany as an adolescent. She has traveled extensively throughout Europe, and has a keen interest in world issues and diverse cultures.

Flor’s story is one of tragedy and triumph. She became an orphan at a young age and was sent to live in an orphanage with her sisters in Lima Perú. While in the orphanage she immersed herself in her studies and was able to earn a scholarship to participate in an exchange program that allowed her to study in Germany. While in Germany she became fluent in German and had the opportunity to travel throughout the continent. Upon returning from Europe she entered the University of San Marcos in Lima to study law.
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Written by: Maria Umar, Goldman Sachs 10,000 Women, Project Artemis Pakistan, 2011 graduate

Assets
Libailities
Revenue
Profit
Gross Expenditure

Here is my understanding of these words before the Accounting class with Prof. Petersen and Sharon Lechter:
Assets = children, family – usually just children
Liabilities = poor relations
Revenue = something they talk about a lot on TV during budget time
Profit = when the bank gives me money at the end of the month on a saving certificate
Gross Expenditure = when you spend so much it’s disgusting

Yep … that’s how bad I was. NO exaggerations here. As a virtual assistant or a businessowner you have to know your finances. No matter how scary they are – no matter how intimidating. But I have always been scared of numbers and fancy words that don’t do anything for my imagination. Then, Project Artemis and Goldman Sachs 10,000 Women program happened.
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By Marcela Cubas Ramacciotti

As a Peruvian, being part of the Salta Internship has been an amazing experience so far. Many friends have asked me: Why did you choose Peru instead of a new country to do your internship? The main reason why I chose this particular project in Perú is because, even tough I have lived all my life in Lima, this internship is giving me a whole new perspective on the dynamics of Lima and the reality of how people live, struggle, and conduct business, even in the most remote corners of this big city.

Lima is a metropolis with nearly 9 million people that has been growing in a massive way during the past several years. For most international travelers, and even for many well-off Peruvians, Lima is essentially reduced to the districts of Miraflores, San Isidro, La Molina and Surco. Now I am lucky enough to be involved in a project that is enriching me with a whole new perspective about what Lima really is.

In the course of this last month, we have been immersed in districts such as San Juan de Lurigancho, the biggest and most populated district in Lima. This district is mostly inhabited by immigrants from Huancavelica and other parts of the Andes, people living in poor conditions who have become micro-entrepreneurs by necessity rather than choice.

Another big, interesting district we have been working in is Los Olivos, unofficially named the capital of the “Cono Norte,” or Northern Cone of Lima. It is one of Lima’s most prosperous districts with a steady trend of economic and social growth. In Los Olivos, you can find the expansive Mega Plaza Shopping center, which move millions of dollars and was created and developed by our Thunderbird alumni Carlos Neuhaus.

In the months to come, we will be immersing ourselves in other interesting and underprivileged districts such as Villa el Salvador, Villa María del Triunfo and Ate.

All in all, Lima is a city that covers a whole range of contrasts, interesting factors and by meeting each of the women entrepreneurs we are learning the reality of this complex and multicultural country.

As a Peruvian and native of Lima, this is an eye opening experience that is giving me as real understanding of Peruvian women’s necessities, struggles, dreams and lives in general.

I am also lucky and proud to be working together with such a brave, enthusiastic and devoted group of T-bird teammates. The four of them are from US and don’t necessarily have any obligation with Peruvian people, but they decided to fly all the way here to meet the needs of Peruvian women entrepreneurs and leave “un granito de arena” (a grain of sand) in the development of these women and of my country.

I am really happy that Thunderbird has given me this opportunity to develop a much broader view about my country and to meet a great group of T-birds, and I look forward to the coming weeks.

By Amy Scerra
Thunderbird for Good, Program Manager

Sharon Lechter comes to Thunderbird representing the CPA, entrepreneur, philanthropist, educator, international speaker and Mom genres. As if this wasn’t impressive enough, she’s also a best-selling author (Rich Dad, Poor Dad; Three Feet from Gold) and a board game creator and innovator. She has a well-rounded knowledge which Thunderbird for Good knew would resonate with our Artemis Pakistan group of women. Sharon spent the first half of the day teaching the women basics of financial literacy. She bounced into the room with her vibrant personality, can-do attitude, and passion for helping women become independent entrepreneurs. This caught everyone’s attention and made it much more fun and easy to commit to learning finance, which so many of us professed as their “weak spot”.
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By Jacquelyn Hunter
MBA Candidate, 2012

¿Cuál es tu sueño? is one of the first questions we ask when we meet the women entrepreneurs we will mentor once a week for four weeks. It is a question that usually leads to a long conversation. Most of the women will share ideas of improving and expanding an existing business with the purchase of new equipment or opening another store in a new location, while others have a dream of pursuing education in order to learn new skills that may open doors to new opportunities.

Diana, 27, is a young entrepreneur with a dream to be the owner of a successful business. Diana is happy to be single and with no children so that she can focus all her time on learning and growing her business. When I first asked Diana about her dream I got a twenty minute answer that included about fifteen possible new business ideas. Diana was motivated and full of ideas for the future, but like many people with a strong entrepreneurial spirit, she couldn’t quite decide exactly which idea to focus on.

During our first meeting I learned about Diana’s current business: two small stalls in a market where she sells dried goods such as beans, rice and flour, and also general goods such as toilet paper, cell phone minutes, red bull and toothpaste. I was impressed because Diana is one of the only women I am working with this month that actually has a functioning accounting system in place. I was even more impressed when I saw that she was creating a cash flow statement at the end of each month using the same model taught in the Salta Training.

Finally, I was happily surprised to see that she was paying herself a salary in order to keep the money in her business separate from the money she uses for personal expenses. The concept of separating business and personal money is very challenging for most micro-entrepreneurs due to the low and relatively uneven flow of cash in the business. I reviewed her notebook with her sales records and saw that she was making a small profit each month, but that overall the business was not growing. Despite her exceptional management of the business finances, she explained to me the two challenges of her business:
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By Amanda Roberson
MBA Candidate, 2012

One week ago, the world watched as Peru’s election results rolled in and an unpredictable scenario unfolded: leftist candidate Ollanta Humala narrowly defeated center-right leaning Keiko Fujimori. It was a chain of events most people in the Latin American world never would have imagined, including a group of Thunderbird students who were in Lima just a few months ago for the school’s Latin American module in Peru. I was part of that group of students back in February. During Professor Roy Nelson’s Latin American Business Environment class, we studied Peru’s political past with regard to its economic development and discussed the potential ramifications of this year’s election on the country’s business climate. As we gave our final presentation, our unanimous assessment was that Peru was likely to continue its impressive record of steady economic growth except in the unlikely event that Humala, a wild card known for supporting nationalization of industries and being chummy with Hugo Chavez, won. But that was a very remote possibility, we said. A slew of moderate, business-friendly candidates were in the running, and one of them was sure to win. We were wrong. 

Now the world continues to watch with anticipation as Humala picks his cabinet members, holds his first official visits with regional leaders and sends other signals about his intentions for his presidency. So far, it’s been a rollercoaster ride for Peru. On Monday, the day after the election, the country’s stock exchange plunged 12.45%, a fall Peruvian media outlets called the biggest in the exchange’s history, forcing its closure for two hours (http://www.eldia.com.bo/index.php?c=Portada&articulo=Peru:-Bolsa-de-Lima-tiene-su-peor-caida-historica-tras-victoria-de-Humala&cat=1&pla=3&id_articulo=64837). The market and the Nuevo Sol currency began to rebound later in the week as Humala appointed economic moderates to his transition team and called for unity (http://www.forexyard.com/en/news/Perus-markets-rebound-after-Humala-sell-off-2011-06-07T172822Z.) On Saturday, the front page of the Peruvian daily El Comercio featured Humala with his arm around former Brazilian President Luiz Ignacio Lula da Silva, popularly known as Lula. Humala spoke of Lula’s success in bringing about economic development while including the poor and said that he will be “inspired” by Brazil’s model without copying it (http://elcomercio.pe/politica/776035/noticia-lula-se-reunio-humala-nego-que-exista-fantasma-hugo-chavez-sobre). 

So, what to make of all of this? Will Humala follow Lula’s example and embark upon a path of inclusionary economic development? Or will his presidency really mean the end of the country’s business boom? In this case, I hope our previous predictions were also wrong.

As I entered my third week as an intern with Proyecto Salta, I spoke to Peruvians about their opinion of their new president and their predictions on what it could mean for their country. Their tones varied from celebratory excitement from those who voted for Humala to grim yet hopeful disbelief from those who opposed him. Maria Fris Sancho is the owner of a busy children’s shoe stall in a downtown Lima market. When we met on Monday afternoon, she told me she was sad for two reasons: (1) yesterday, someone had stolen 500 Soles worth (about $165) worth of merchandise from her stall and (2) Humala won. Regarding the latter, she said she feared a trickle-down effect. “The big companies leave. That means less jobs. That means people have less money, and that means that they buy less shoes from me,” she said. Our taxi driver Erver, an enthusiastic Keiko supporter, said he feared what Humala was capable of, given his past as a militant rumored to have instigated violence. Others said that Humala’s chumminess with Chavez (from whom he attempted to distance himself toward the end of the campaign) meant the Peruvian leader now owes a debt to his Venezuelan counterpart, and the consequences of that repayment could be scary.
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