Seedlings.

A loan epitomizes hope. On the part of both the lender and the borrower, a loan says (in its construct and definition): “There is possibility here. Something new can be built.” A loan, unlike a gift or donation, demands repayment. It implies that with effort and support, the borrower can so advance the particulars of her situation, that she will be able to take the loan, turn it into dollars or tools or plants or milk in excess of the original amount, and then repay the lender. Where a gift or donation implies sympathy with the recipient’s situation, and a will to help improve it, a loan implies a fundamental confidence in the abilities of the borrower.

In October 2010, as we were starting our new pilot farmer loan program to reduce our farmers’ cost of capital from 30%-40% interest rates to just 10%, the people around us expressed a lot of fear. There was concern that the loans would not be used for income-generating activities. (“You hand those farmers a chunk of cash like that, and they’ll have bought a new motorcycle before you can even blink.”) There was concern that the loans would not be repaid. (“Rationally, the way you’ve structured the program, these guys have no incentive to repay the loan.”) There was even concern that there were prohibitively complex legal structures to allow us to grant the loans. (“It’s likely that what you want to do is impossible, legally. You don’t want to end up in jail, do you?”)

But our knowledge of our farmer-partner-borrowers’ abilities and characters gave us confidence in the value of the loans, trust in their will to repay, and hope that they would use the money to improve their economic situation and thus be able to repay this non-gift.

It’s still early, but in the days we spent last week with the farmers in Jarabacoa, we saw promising affirmation of this trust.

Most concretely, we’re seeing proof that our basic goals are being accomplished: the loans are being used for revenue-generating, coffee-related activities, and are being steadily paid off.

Additionally, we saw something very specific and promising from Erasmo Aracena. Erasmo borrowed about 5,000 pesos (about USD $140) and as of today has paid off almost all of that amount. As he paid off the loan so quickly, we wanted to be sure it had actually been of benefit to him, so we asked him specifically what he had spent it on. He showed us. On a previously eroded and unused portion of his land, he used the money to purchase, plant, and fertilize (organically) thousands of coffee seedlings, which will generate significant and sustainable income for Erasmo and his family over several years.

He couldn’t have planted the coffee without the loan, might not have been able to count on a good price for the coffee without our long-term contract, and was able to pay off the low-interest loan within months of receiving it. The moment when we stood shoulder-to-shoulder with Erasmo and surveyed the seedlings was a moment of hope, satisfied; a moment of trust, reciprocated.

Rómulo said to us early in our visit, “You trusted us before we trusted you, and that’s why we are so committed to this program.” What Rómulo may not be as conscious of is that it’s easy to trust when we have such consistent evidence that the people we are working with are of such phenomenal ability. So we say to Rómulo: you merited it before we trusted you, and that’s why we are so committed to this program.