Youth around the world: What is your back background (personal life/experiences, academic and professional life)?
Marcela Torres: During my professional career I have worked in several different industries and for companies of all sizes. Only by experimenting in diverse activities, I believe I now found my true passion. I studied engineering in Bogotá and did a MBA last year at IE Business School in Madrid. A business approach to everything has been a constant in my career, even now that we have a social enterprise. I started my career at Microsoft. After 3 years, I explored the hospitality industry and then moved into strategy consulting where I specialized in financial institutions and government agencies. After some years as a consultant, I worked for the central government of my country in the process of reintegrating ex-combatants into society. Specifically, we designed a fund to use microcredit as a tool for economic reintegration and peace building.
In parallel to the last 3 jobs, 2 friends and I developed a pilot project to learn hands-on about microfinance and development related issues. After the MBA, and with a strengthened team of exceptional people, this year we founded our own Microfinance Institution (MFI) in Bogotá to contribute to social and economic development of our microentrepreneurs using a sustainable and profitable model.
Youth around the world: When and how did you come up with this idea?
Marcela Torres: Back in 2005, while working as consultants, 2 friends (Santiago and Francisco) and I used to get together every Tuesday to discuss ideas on how to make some kind of contribution, given that we have the blessing of having education and opportunities in a country where almost half the population lives in poverty. We thought about giving presents to children in Christmas, building a house for elders and donating our time to a charitable cause.
But all that did not seem sustainable enough. We kept brainstorming until we read “The banker of the poor” by Muhammad Yunus, where we found the inspiration we needed. His ideas, with some modifications, were perfectly applicable to the reality of our country, the industry was very incipient at the time and it seemed to be a sustainable and scalable model.
Youth around the world: Tell us about your project.
Marcela Torres: After some months of intensive research, we decided we needed a real client; somebody in need of financing and whom we could track closely to see the results of our experiment. We chose Dalila, the lady that helped me around the house. And one day talking to her about life, she told me that her dream was to have a hot dog stand. We lent her $120 to buy it and in just two months of operations, she had doubled her income. It is amazing how a relatively small amount of money can cause such a great impact on a whole family. Inspired by her results, we went on with a pilot project that reached close to 100 microentrepreneurs. The project allowed us to get a pretty comprehensive understanding of our client’s needs and behavior and allowed us to develop our own strategy and methodology.
The pilot project was the seed of what today is Prospéritas Microfinanzas, the microfinance institution that Jennifer and I lead in Bogotá. Jennifer is a very inspiring “gringa” that decided to move to Colombia to start this venture with me.
Youth around the world: Tell us about how you project is going. Which results has it achieved?
Marcela Torres: During the MBA, we put together a new team of exceptional people, equally passionate about the mission we pursue. We carefully developed the whole business plan and at the end of the program we won the prize to the “Best entrepreneurial project of the year” at IE Business School.
The project is now a real company. Prospéritas Microfinanzas provides small amount loans to low-income entrepreneurs, solely for productive uses.
We are incorporated as a microfinance institution under the Colombian Law. Dalila, our first client, is working with us as a credit analyst and is doing a brilliant job. She is learning how to use computers, got a scholarship for a course in entrepreneurship and is receiving training from us on financial analysis, client service, and basic business development topics.
Youth around the world: Tell us about the biggest challenges you faced working in this project.
Marcela Torres: We have faced different challenges in each phase of our venture. While developing the business plan, I’d say that the most difficult part was demonstrating to our classmates, professors, mentors and judges that this is NOT a high-risk industry. In fact, our clients pay better than someone like you and me.
Currently, the biggest challenge is to find resources to get past the first year of operations. There are enough funds available for this industry, but it is nearly impossible to access the institutional offering being a start-up.
Youth around the world: Tell us about what kind of help you would like to have to be able to have a bigger impact.
Marcela Torres: Our model has two components:
- A microfinance institution through which we help strengthen income generation activities; and
- A not-for profit that addresses the social development side of our intervention.
We could use help in both.
Microfinance is a capital-intensive business, so the more funds we get in the form of debt or equity, the more microentrepreneurs we can support.
But credit is not enough to cause a true, sustainable impact. So we also need help in building and delivering non-financial services to our clients.
Youth around the world: Tell us about how you see you project in the future (ideal vision).
Marcela Torres: We like to say that Prospéritas is a company of millions of clients… we just decided to start with a few dozens.
A huge outreach is definitely something we want to accomplish. It is also our dream to have a company that serves as a platform of products and services that are relevant to the development of our clients.
Youth around the world: Leave a message to youth around the world that might get interested in running the same kind of project in their countries/communities.
Marcela Torres: Microfinance is successful in places of high poverty rates and a low penetration of the formal banking system. The market is still way bigger than what we would like it to be, and there is plenty of room for a lot of us to jump in. The more competition we have, the more clients get served and with better conditions.
Innovation is key, but there is no need to start anything from scratch. We have leveraged the experiences of others and you are welcome to build up on ours.
Youth around the world: Leave your personal message to the youth around the world.
Marcela Torres: If you are into technology, education, real estate, finance, agriculture, commerce, health, marketing, manufacturing, CSR, you-name-it… we need you.
No matter what your passion is, I’m sure that with a little creativity, we can link it to a platform of services for development, to contribute the world we want to share.
Got inspired? Take a look at other examples:
What do you do with a wash-machine? Wash clothes?
In Colombia it IS a micro-BUSINESS: Samuel, a wash-machine renter.