After his career was over Valle returned to the Dominican Republic to begin a microcredit operation. It gives small loans to people who the banks declare unworthy of credit, to help them with their own small businesses. Valle's organization also does a lot more for the people of the Dominican, providing schools and career centers.
From the Readers Digest, writer Todd Pitock visits Valle in the Dominican Republic.
Last November, I met with Valle in the Dominican Republic to see the results of that promise, a nonprofit he and Vicky established in 1995 with $30,000 of their own savings. Esperanza, which means "hope" in Spanish, is a microcredit agency, offering short-term, low-interest loans starting at about $150 to help extremely poor people get started in business.
Although microcredit banking has been around since the 1970s, Esperanza added other elements, creating a school, a dozen computer training centers, a member-funded health care plan, a water treatment system, and a home improvement initiative. It has also spearheaded the construction of five baseball fields that would be the envy of many affluent communities in America, fitting the sport into its broader goal of community development.
We started our tour in Santo Domingo--Valle, son Philip, now 23, and Esperanza's executive director, Carlos Pimentel-and drove north over a mountain range soaring 9,000 feet, dense with thick, lush jungle.
At a glance, a visitor could be lulled into thinking that all is well in the Dominican Republic. In addition to having enchanting scenery, the country has recently experienced between 7 and 10 percent in annual growth. Modern highways sport an astonishing number of SUVs. New real estate and tourism districts, such as Cap Cana on the east coast, are positively opulent, and indeed, even the pastel colors on many shanties balanced on hillsides suggest more cheer than perhaps they should.
But they can't paint over the reality for many Dominicans. Of 9.3 million people, 2 million live on less than $2 a day. Twenty percent of girls become pregnant before they're 19, and illiteracy and crime are pervasive. Despite promising economic progress early in the decade, the nation's gross domestic product plunged 15 percent several years ago. Haiti, which shares the island that Christopher Columbus called Hispaniola when he landed there in 1492, is even worse off.
The desperately poor are, of course, Esperanza's focus--people for whom it is not a credit crunch but a crush, whose only access to capital would be through loan sharks charging usurious interest rates.
Here is how microcredit works: People with ideas for businesses get together and apply as a group for a loan, or what Esperanza calls a bank of hope. Typical ventures include sundries shops, hair salons, and roadside eateries. Members are almost always neighbors, and they pledge responsibility for one another. At twice-monthly repayment meetings, they cover for anyone who may be short, all of which fosters mutual support and obligation. Repayment rates are 98 percent in the Dominican Republic as well as in Haiti, where Esperanza launched in early 2006. Once debts are settled, borrowers negotiate new loans.
As word of Esperanza spread, the pace of lending accelerated. With 20 borrowers when it began lending in 1995, Esperanza has since dispersed almost $15 million through 75,000 loans, including nearly 21,500 active accounts in 2008. It has 2,800 borrowers in Haiti. The organization estimates that at least five people benefit from each loan in the Dominican Republic, and six in Haiti.