centro comunitario
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A FINANCIAL INCLUSION
SOLUTION FOR NICARAGUA
Presented by
A FINANCIAL INCLUSION
SOLUTION FOR NICARAGUA
Presented by
Humanos marries the mind of business with the heart of humanity.
T he Humanos Institute is a not-for-profit start-up dedicated to marrying
the mind of business with the heart of humanity to help transform the
lives of people living in poor communities. We bring multi-disciplinary
teams from industry, academia, government, and not-for-profit sectors to co-
create innovative, scalable and sustainable solutions to the most pressing prob-
lems of our times.
Our vision is to
reimagine the
world and how
we live our
lives in it;
helping those
in need and
inspiring
people to
reconnect with
our human
values.
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a human-centred approach to problem solving that was born in the innovative
culture of Silicon Valley and is being used by long-time innovators like Apple
and disruptive start-ups such as Air BnB. Design Thinking is grounded in the
premise that we begin with a deep understanding of the needs of the people of
whom we aim to help, and engage with them as equal partners to develop solu-
tions. In this approach, we follow an empathetic loop of asking questions, lis-
tening, learning, testing ideas out, getting feedback, iterating, and repeating. In
the Design Thinking process, the people and their context is of paramount im-
portance – we don’t show up with preconceived solutions, but instead focus on
finding out what truly matters at that time and in that place for the community
with whom we’re working.
At Humanos, we have just started to put into motion our vision to reimagine
the world and how we live our lives in it. We want to encourage people to re-
connect with our human values and instead of focusing on what makes us dif-
ferent focus on our shared humanity. We want to inspire people to redefine
what it means to live a good life, where we are able to see beyond our own
needs and desires, and take action to help improve the lives of others.
We are experts in the Design Thinking
methodology,
OUR PARTNER
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OUR GOAL
To immerse ourselves in the
community, to understand their hopes
and dreams and fears, and to co-
create a solution with them that
ushers them into a new era of
financial inclusion.
OUR CHALLENGE
How might we develop a financial
inclusion program that benefits the
community as a whole?
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Design thinking is a human-centered
approach that starts with the people you’re
designing for and ends with new solutions
that are tailor-made to suit their needs. It
combines human desirability, technological
feasibility, and business viability to produce
break-through innovation.
WHAT IS DESIGN THINKING?
w e a r e h e r e
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UNDERSTANDING
BRAINSTORMING
R E F I N I N G
Empathize | Def ine
Ideate | Prototype
Test | Prototype | Repeat
OUR HOST
750
rural men,
women, and
children
El Naranjo
Jinotega,
Northern
Nicaragua
Region
of dry
mountainous
land
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wood, stone,
bamboo, and
dirt homes
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OUR FIELD WORK
1 week
32 interviews
110 hours of
design thinking
“Using design thinking as a template
to tackle poverty by creating new
innovative solutions and gathering
insights from the villages truly gives
you a deeper understanding of the
problem and thus being able to
create a more
meaningful
solution.”
MONICA
VOHRA
It all starts with a distinctly human
capability: empathy. The ability to understand
the people you are trying to help, to be able to feel
their feelings, and to be able to see the world
through their eyes. That is the cornerstone of
Design Thinking and the best way, arguably the
only effective way, to understand the problem
you are trying to solve.
So, as the initial step in our journey, we visited 32
families in their homes. We talked and, more
importantly, we listened. This opened a window
that allowed us to peek into the minds and lives
of the locals, bringing us one step closer to a true
understanding of how the locals see life.
Working in the context of microfinance, we
focused on the behaviours and attitudes
concerning financial activities at home, at work,
and with financial institutions. We explored what
the financial culture in El Naranjo was like, why
people used or did not use financial services, and
how it affected their ability to prosper.
We found seven key barriers to saving and
borrowing externally, but the over-arching and
underlying barrier was trust. Trust would be the
key ingredient to break down any of the barriers. FEAR
TRUST ACCESS KNOWLEDGE
INABILITY
TO SAVE
FINANCIAL
CULTURE
SOCIAL
STATUS FEAR
Trust a firm belief in the reliability, truth, ability, or strength of
someone or something
SELF
Self-Confidence
“I am afraid I can’t pay back
a loan with the money I
make.”
Self-Image
“I’m too poor— banks are
for people with more mon-
ey.”
COMMUNIT Y BANK
Weak Solidarity
“It will be hard to get help if
something really goes
wrong.”
Financial Façade
“I don’t think everyone tells
the truth about their mon-
ey.”
Privacy
“Sharing details about my
money makes me feel un-
comfortable.”
Banking Image
“I don’t trust the banks to
keep their word.”
Power Position
“The bank can take
advantage of me because
they have the knowledge
and the money.”
Limiting Assumptions
“The banks don’t trust me
because I am poor.”
LA
CK
OF
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Knowledge facts, information, and skills acquired by a person
through experience or education
Access the right or opportunity to use or benefit from something
LA
CK
OF
Formal Education
“I didn’t go to school, and
I’m not sure I can learn
other things.”
Banking Knowledge
“I don’t understand how the
bank words and all their
rules.”
Tunnel Vision
“Farming is all I know.”
Physical Costs
“The cost and time it takes
to travel to the bank is not
worth going.”
Banking Fees
“The bank charges a lot of
money monthly to take out
a loan.”
Collateral
“I don’t have a house deed
or anything else that the
bank will accept as collat-
eral.”
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Fear a feeling of anxiety concerning the outcome of something
or the safety and well-being of someone
Status a person’s standing or importance in relation to other
people within a society
Future Uncertainty
“I’m scared I won’t be able
to pay back the loan
because the harvest
changes every year.”
All or Nothing
“I don’t want the bank to
take my house—it is all I
have.”
Fixed Status
“It’s hard to make my life better even
though I really want to and try to.”
Reputation
“I don’t want to be seen as someone who
cannot keep his word.
Additional Burden
“I’m worried this will be too
much for me to handle.”
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Culture the attitudes and behaviour characteristic of a particular
social group concerning personal finances
Save possession of the means or skill to keep and store up for
future use
INABILITY TO
Unachievable Goals
“I want to buy a cow, but it
is impossible to save
enough money.
Weak Investment Mindset
“I don’t sell my beans until I
need the money to pay for
the necessities for my
family.”
Weak Saving Habits
“I spend more when I earn
more, and spend less when
I earn less—there is no
room for saving.”
Mindset
“It’s impossible to save because every-
thing is so expensive.”
Actual Inability
“With three children, we don’t have
enough money to save, especially with a
bad harvest season.”
WEAK FINANCIAL
LackOf TRUST
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Trust: the underlying barrier.
Lack of trust not only hinders borrowing and saving,
but individual and community development.
Without trust in self, there will always be a perceived inability to change
one’s circumstance– social or financial.
Without trust in community, knowledge-sharing will not be commonplace, and
the pressure to stay within social status will
prohibit collaboration and the betterment of others.
Without trust in banks, fear will persist, and resources will be
underutilized and deemed inaccessible.
Trust: the overarching barrier.
These barriers become needs and
these needs become the platform
for our solution.
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I need to trust my abilities
and feel that others are
trustworthy.
I need to learn more so I
can confirm or correct my
assumptions.
I need to have access to
money for planned and un-
planned situations.
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I need to have reassurance
and protection in uncer-
tainty.
I need to overcome social
pressures and limitations.
I need to build financial
discipline and a long-term
mindset to achieve my
goals and dreams.
I need to understand the
benefits of and opportuni-
ties for saving.
"Coming up with an innovative
solution that is sustainable in the
long-run is a collaborative effort—only
when we co-create together with
community members can we achieve
truly effective solutions.”
PABLO HENNIQUE
The Centro Comunitario del Naranjo will be a
purpose built structure where the people from El
Naranjo can gather and benefit from the services
that it houses, namely the trade school, the
financial literacy training, and the co-operative
bank. It will act as a central location where the
people of El Naranjo can come together, help
build a sense of solidarity, increase trust and
benefit from the services it provides.
The construction of the centre will be carried out
by the people from El Naranjo. It is important to
make the people of El Naranjo feel that the centre
belongs to them by working together, as a
community, to build it. The design of the centre
could be done by one of Global Brigades
Architectural Brigades. Funding would come from
external sources.
The Centro Comunitario is not only a practical
place to carry out services for the community, but
is also a powerful symbol of what El Naranjo can
achieve when the community comes together to
work as one for the benefit of all.
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A new skill can become a new
profession. This helps to diversify
income and relieve dependency on
agriculture. In a school setting, the
community will be learning trade skills
together and working together, building
solidarity. The goal is to see people
collaborate through the school to form a
business like a bakery or repair shop.
Through these
workshops, people
will be empowered
individually and as a
community.
Trade School Workshops that provide men and women an opportunity to
learn new skills.
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In El Naranjo, the top expressed desired
skills included baking, tailoring, and
carpentry. The workshops offered will be
catered to the needs and opportunities of
each community. Participants benefit by
using finished products for personal or
commercial use. Not only do they learn new
skills, but also earn a source of revenue.
These classes could be taught be community
members who are experts or by external
volunteers. There is also potential to form
relationships with local colleges and
businesses.
The specific details of workshop length,
duration, and frequency will be decided
during implementation by each community’s
preferences.
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Chicken Program A program designed to teach the financial essentials to
those in most need within the community in simple and
familiar terms.
T he chicken program will be used as
a vehicle to teach the community
members concepts like Borrowing,
Saving and a Business Mindset, using
chicken!
Most of the community members are
already familiar with and feel comfortable
when talking about chicken, eggs and hens.
They know the growth cycles, how to take
care of them and their value, so why not
take advantage of this to introduce new
concepts that could otherwise be too
intimidating on their own?
This program targets families in most need
and individuals who would probably not
benefit from having a community bank
because of simple fear of the unknown.
These individuals could also be identified as
the late adopters of the community bank.
From their perspective, this program offers
a great opportunity to receive some
chickens, training and guidance with no
upfront cost. Each selected family will
receive ten hens and a rooster to start. They
will be mentored in the key principles of
business, teaching them that these hens are
assets that will generate a recurring
revenue.
The coaches will work with the selected families to ensure that the hens multiply in
a sustainable manner, and any additional eggs will be sold. They will do this enough
times until the money earned will be enough to do the following:
Repay the original cost of the ten hens and the rooster
Save some money in the community bank
Purchase food and a fence for the hens to keep producing eggs
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By repaying the original cost of the hens,
the families will learn about repayment and
interest rates. By saving some money in the
community bank they will begin to lose the
fear of saving money outside their home.
And by purchasing food and a fence they
will be reinforcing the long-term business
mindset required to get out of poverty.
Overall, the program aims to
empower low income individuals
by providing them with a new
source of income, financial
security and initiate a change of
mindset within the community,
one where long term investment
and businesses are the norm.
x 10
$ $
$ $
$
Community Bank A cooperative owned and run by the community with
financial services designed and available for all.
T he community center will have a
community bank dedicated to
providing affordable and accessible
financial services to the people of El Naranjo.
It will be run by community members
elected by their peers from the community.
Initially, the community bank will offer
savings and loans to individuals. In order to
have access to these services, every person
will have to go through financial
literacy training to get the
necessary knowledge in order
to understand and maximize
their benefit from the banks
services. This step is crucial
because we realized
that
without
proper financial knowledge, these financial
solutions won’t be effective.
The loan services will be initially available
on an individual basis to all those with some
sort of collateral. We recommend interest
rates be set at 1% per month to begin with,
which is below market rates to encourage
engagement and build trust. In the long-run,
group loans can be considered and interest
rates modified by the executive committee
of the bank.
The savings services will be available to
everyone in the community. We recommend
to set the interest rate in line with rates
offered by other commercial banks in
Nicaragua and higher than the inflation rate.
The success of the community
bank will depend on creating a
collaborative culture whereby
community members feel
ownership in the bank and
trust in its governance.
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Key decisions regarding the process of governing the bank that need to
be addressed include:
Length of service for administrators
Process for making decisions such as setting of interest rates for
borrowing and saving and who qualifies for special programs
How to deal with default
1% Loan
Interest Rate
Modified Loan
Interest Rate
TIME
Financial Courses Group classes that provide focused financial education
offered concurrently with the bank’s services.
T he courses will be simple and
friendly. These will be offered in an
ongoing basis to the community
members, first by external specialists, and
eventually by local experts within the
community. These courses will cover three
main areas: borrowing, saving and starting
a new business.
For anyone taking out a loan from the
community bank the borrowing course will
be a requirement.
They will learn about what
the principal is, interest
rates, the terms of a loan,
collateral and other concepts.
Similarly, the saving course will
be mandatory for anyone that
choses to open up a savings
account. This course will discuss
concepts like return on savings,
shareholding and the safety of the bank.
The business course will be offered for
anyone participating in the chicken
program, in one of the workshops or
anyone who is interested in learning more
about starting a business. Concepts like the
value of assets (chickens, pigs, sewing
machines, etc.), return on asset, budget
allocation, negotiation skills, and thinking
beyond the short term will be
covered.
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The financial courses will be the
glue holding the entire financial
literacy of the village together. It
will strengthen the sense of
community in El Naranjo and it will
empower its members.
Desirable &
Beneficial Skills
+
Group Training
Tangible
Investment Loan
+
Training
+
Financial
Support
Loans & Savings
+
Community
Location
+
Training
Self-Confidence
+
Collaboration
Self-Confidence
+
Knowledge
+
Financial
Discipline
+
Overcoming
“Poor” Status
Access to
Resources
+
Self-Confidence
+
Less Fear
trade school chicken program community bank
Tailored
Curriculum
+
Practical
Application
Self-Confidence
+
Knowledge
+
Ability to Save
Confidence, growth,
and prosperity
as a community
financial courses
“The Centro Comunitario, which
includes a co-operative bank,
job skills training, and financial
literacy training is meant to
combine the energies of the
community so that together
they achieve much more than
on their own.”
LOREA SAAVEDRA
HOFMANN
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Thank you. We couldn’t have done it without you.
HUMANOS
Niels Billou
Pablo Hennique
Matt Smart
Stami Zafiriou
Lorea Saavedra
Hofmann
Adil Mansouri
Asmae Skalli
Monika Vohra
Justina Li
GLOBAL BRIGADES
Jairo Cortez
Bismark Silva
Roberto Nicaragua
Norlan Arostegui
Wilmer Arostegui
BIZ KID$
Jeannine Glista
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