BWAP 2024: Why Nicaragua? ~ Rev. Mark Elsdon

Mark is the Executive Director at Pres House.

How did a group of folks from Pres House end up spending a week touring Nicaragua in January to learn about history, politics, culture, people, and microfinance? Well we took a flight from Madison to Miami and then Miami to Managua…

But beyond the method of arrival? How did we end up doing this trip as an organization? Well the roots of this trip actually go back 60 years!

In 1965, National Partners for the Americas assigned sister states to create a mutual partnership and sharing between various locations throughout the Americas. Wisconsin was assigned to Nicaragua, perhaps because of its similar geographic and population size along with a similar emphasis on farming. A number of Wisconsin cities and towns became “sisters” to Nicaraguan cities and towns, spurring connections and organizations to form between the people, including from our own campus and city here in Madison. In parts of Nicaragua during that time you’d very likely come across someone wearing a Milwaukee Brewers hat. The Wisconsin Coordinating Committee on Nicaragua (WCCN) was formed out of this movement.

The revolutionary war in Nicaragua between the Contras and Sandinistas in the 1979 was devastating and left many Nicaraguans in dire economic straits. When the war eventually ended, WCCN and other people in Wisconsin asked their friends in Nicaragua what kinds of support Wisconsinites could provide Nicaraguans as they set about to rebuild their lives. Nicaraguans asked for access to working capital (financial loans) so they could start small businesses to move out of deep poverty. WCCN transitioned into a microfinance loan fund renamed Working Capital for Community Needs. Church folks and others in Madison raised money to lend to people in Nicaragua so they could bypass traditional banks that would not lend money to the working poor. It is this organization, WCCN, that Pres House partnered with on our BWAP trip.

Jack is going to talk about the details of how microfinance works in a minute but I want to share a little about the connection between Pres House and WCCN. In the 35 years since WCCN started a microfinance loan fund it has grown and now provides working capital in 8 countries in Latin America. About 250 people and organizations in the United States invest money into the WCCN fund which is now about $15 million in size. Erica and I have invested some of our own money in this fund. And last summer Pres House moved about 12% of our investment portfolio, or $300,000, into the WCCN fund. WCCN then lends that money to 20 microfinance institutions that are locally led in each of the eight countries where they work.

These local organizations exist to provide financial services to people who would otherwise have little to no access to working capital. Two thirds of the end-borrowers are women and about two thirds live in rural areas which have even less access to traditional banking than urban residents. These end borrowers pay the loans back with interest which covers the cost of providing the loan, staffing the microfinance institution, and dealing with inflation that is rampant in many of the countries where this is happening. Eventually the money flows all the way back to the United States and the investors here receive a small financial return and their original investment back (although repayment to investors is never guaranteed).

In the case of Pres House, the interest income we receive on our investment funded the trip the group took to Nicaragua – thus closing that financial loop. Our trip to Nicaragua was an opportunity to see firsthand how our money flows, an important thing for us to be aware of because unless you stick your money under your mattress, your money is at work in the world 24/7 doing something whether it’s funding Jeff Bezos’ next trip to space or the latest addictive social media platform Mark Zuckerberg unveils. Besides love, Jesus talks about money more than anything else; as Christians, we are called to faithfully use money to love our neighbors.

During our time in Nicaragua, we learned that microfinance isn’t perfect; it doesn’t solve all the problems that lead to poverty and inequality. Systemic and political changes are still needed, along with charity. However, we saw the power of microfinance to change lives.  Microfinance assumes the end borrowers are intelligent, resourceful, and capable people. It provides them with agency and respect and trusts them with capital to make use of it as they best see fit. For that I’m grateful and glad that we at Pres House are a part of it.

Read the rest of the BWAP Nicaragua 2024 reflections:

Jack Wilharm ~ The Power of Microfinancing
Mei Hippe ~ Perfect Solutions?
Nathan Tan ~ Politics and Faith
Aurora Kuelbs ~ Opportunity
Allyson Mills ~ Grace and Power Under Dictatorship
Kyle Digman ~ Murals in Nicaragua
Will Clancy ~ Politics of Faith
Sophie Elsdon ~ Nicaraguan Pride