Non-Profit Supports Entrepreneurs with Tour Fees
By Helena Wahlstrom
In 2007, Trip Sweeney proposed an alternative to “slum tourism,” one of the fastest-growing niche tourism sectors in the world, that tempts adventure-seeking tourists from wealthy countries to visit impoverished areas.
Instead of this form of tourism that more often than not offers no financial benefits to the people of these regions, and risks reducing local problems to nothing but entertainment for the wealthy visitors,
Sweeney envisioned tours that combine the educational and cross-cultural benefits of tourism with microfinance, an innovative form of lending that allows impoverished people to take advantage of small-scale loans.
In 2008, Investours founder Ashwin Kaja traveled to Oaxaca, Mexico to research the potential of microfinance in providing an ethical alternative to slum tourism. Inspired by Sweeney’s article, non-profit organization Investours was born, with Sweeney as co-founder and board of directors member. The organization works to combine tourism and microfinance to combat poverty.
“In Oaxaca, we developed a unique model for microfinance tourism that serves as the core of the Investours program today,” said Corrina Jacobs, chief operating officer for the organization.
Investours are day-long tours, during which participants, or “investourists,” join a small group led by the organization’s staff to visit with entrepreneurs in the local community. The tours, according to Jacobs, are perfect for travelers who are already vacationing in the locations, but Investours is also working on partnering with tour companies to offer week-long itineraries.
During the tour, visitors learn about life in the community and hear about the business ideas of local entrepreneurs. At the end of the day, the group gathers to discuss their experiences and decide which of the entrepreneurs gets a 100% interest-free microloan, consisting of the tour group’s pooled fees. Visitors can keep track of the loan process online as entrepreneurs repay it in small weekly increments.
If an entrepreneur or entrepreneur group is not chosen for the loan, they remain in the program, eligible to be chosen by another investourist group. If the entrepreneur is still not chosen after three visits, Investours provides them with a loan along with business advice.
Microfinance Combats Poverty
“Microfinance fills the gap left by traditional banks,” said Jacobs. Pioneered by Muhammad Yunus and his Grameen Bank in Bangladesh in the 1970s, microfinance helps the poor to combat poverty through small loans, typically between $50 and $500. Though small, these loans can have a tremendous impact on people’s lives, as many poor borrowers are unable to attain traditional loans due to lack of collateral or credit history.
With a loan of $100, an unemployed woman can open a roadside food stall, buy raw materials or purchase extra livestock, for example, and invest those profits toward educational opportunities, health and nutrition for her family, Jacobs explained.
Recipients of Investours microloans are reaping the benefits: after vegetable vendors Augustina Shayo and Anthonia Kessy received a $200 loan, their profits quadrupled.
More than 100 million customers are now taking advantage of microloans around the world, borrowing from more than 10,000 microfinance institutions, according to futurity.org. The Grameen Bank alone has loaned $9.4 billion through more than 2,500 branches worldwide, according to microfinanceafrica.net.
Yunus’ and the Grameen Bank’s success was honored in 2006 by the Nobel Committee, which awarded them a joint Nobel Peace Prize that year.
“Loans to poor people without any financial security had appeared to be an impossible idea,” the Committee wrote in a press release announcing the winners. “From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty.”
Making a Difference in Mexico and Tanzania
Investours has also found success in making a difference in impoverished communities through microfinance. The organization now operates tours in Dar es Salaam, Tanzania and Puerto Vallarta, Mexico, since 2010.
“Since our pilot program in 2008, Investours has granted over $20,000 as 148 micro-loans to micro-entrepreneurs in Mexico and Tanzania and educated over 360 travelers,” Jacobs said.
“The loans have enabled Carmela to repair the bug screens on her small restaurant in Bucerias and add more seating, Austina to add more inventory to her vegetable road stand in Dar es Salaam, and Luz to begin work on a taco stand outside her home so she doesn’t have to sell her food on the street and be away from her children,” Jacobs listed a few examples of how Investours’ activity has contributed to local communities.
Jacobs told stories of how interaction between visitors and locals can prove beneficial in a surprising way:
“During a tour in the small town of Sayulita, a tourist asked Concha, the owner of a small fruit stand, about her primary customer base. Concha replied that she mostly serves locals, even though her stand is located in a main thoroughfare with many tourists and her products are prepared hygienically. The tourist suggested that Concha put a sign reading, ‘All fruit washed with purified water’ to increase traffic. After making this small change, Concha’s business has improved markedly.”
In another example, an investourist saw the paintings of dressmaker Catalina, one of Investours’ most recent loan recipients, and asked if she ever sells them. When she responded no, the visitor said, “I think your work would be very popular among tourists here!”
“Since then, Investours has been working with Catalina to find venues to sell her work,” Jacobs said.
In Tanzania, Investours works in partnership with Maisha Finance, a microfinance institution. In Dar es Salaam, a densely populated and diverse city, visitors experience the Mwenge Woodcarvers’ Market, the biggest outlet of traditional Makonde carvings in Tanzania.
Investourists will meet with entrepreneurs from the Mwenge area, visiting local cultural sights and enjoying a traditional Tanzanian lunch prepared by local woman. The weekly tours cost $200, which is split evenly among the participants.
Investours’ Puerto Vallarta tours operate in partnership with Se Mas Microfinanzas. Visitors meet with entrepreneurs who need loans to start business projects including food stands or taquerias, fishing and dressmaking. Homemade Mexican snacks are included in the fee. The Puerto Vallarta tours run every Thursday and Friday, and tickets are $59 for adults, $49 for students, and $39 for children ages 3-11. Children under 3 attend for free.
Tour Fees Aid the Neediest
On these tours, visitors experience local culture in a way that pleasure-seeking tourists can’t. Although Puerto Vallarta is known as tourism hub, poverty persists behind the scenes. 10% of dwellings in the Puerto Vallarta metropolitan area have no potable water supply, 8% have no connection to a sewer or septic system, and 4% have no electricity.
While the region offers plenty of opportunity to surf, shop and tan, Investours takes visitors beyond the typical tourist traps to experience Puerto Vallarta’s diversity in a way that allows them to contribute their tour fees to help the neediest.
Reception for the organization has been enthusiastic, with visitors raving about their tours online. “This is a unique experience and a great way to meet local people working to improve their family’s lives,” said Bob5440 from Vancouver, Canada on TripAdvisor’s Investours reviews page.
“We met with 3 entrepreneurs and their families. I learned about the obstacles and high interest rates entrepreneurs in Mexico face. It was well worth taking a couple hours from my vacation and an opportunity to help a family work towards realizing their dreams and goals.”
“There are many wonderful things to do and see while visiting Puerto Vallarta, but few as memorable as an INVESTOUR. Led by a personable, organized and knowledgeable team, this tour takes you through neighborhoods and into locals’ homes you’d rarely have an opportunity to see otherwise,” sen_toni from Athens, Georgia wrote.
“The most valuable aspect of this tour is that it provides tourists with opportunities to see the ‘real Dar’ outside of the fancy and sterile rows of hotels on the Peninsula and in City Center,” pjleonard37 from Cambridge, Massachusetts wrote.
“On our tour we were able to invest in a vegetable seller who was looking to expand the variety of the foods she carried. She is a single mother who used the profits of her business for housing, food, and to pay for the school fees of her two children, 10 and 15. Being able to meet and assist this woman improve her standard of living was the highlight of the tour for me.”
During the upcoming year, Investours plans on opening a new program in Cancun. “We are also currently revamping our website in order to further engage with tour alumni through a regularly updated blog and more extensive updates about entrepreneurs and the community in a brand new microfinance center,” Jacobs said.
“Overall, our plan is to continue building on our existing programs so we can serve more inspiring micro-entrepreneurs and create a network of travelers committed to the global fight against poverty.”
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