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Miami Herald
Loaning hope to the poor: Thanks to a former major league

December 14, 2003
QUISQUEYA, Dominican Republic - Pants.

That's what has given Ana Reyes' mentally retarded son Randi the hope of a future. Not a better future, mind you. Just a future.

A small plastic bag.

Anita Martinez holds it up and shakes its contents like a talisman.

"This," she is saying of the simple medicine inside, "is what's changed our lives."

A second-hand sewing machine.

That's all Milan Tapia needed to start her own business out of her house, allowing her to realize her dream of teaching illiterate children how to read and write.

All those things were out of reach for these three women -- and thousands like them -- until Dave Valle, a former major league catcher with a heart as big as his lifetime batting average (.237) was small, established his groundbreaking "trust bank" in the Dominican Republic six years ago. Starting with $50,000 in seed money, much of it raised with the help of fellow ballplayers, Valle's program has gone on to lend more than $4 million to more than 15,000 of the island nation's most destitute, many of them women.

The key word here is lend, for this is no charity. Before getting the money that allowed them to buy the medicines they could not afford or acquire the sewing machine that would transform a neighborhood, loan applicants had to develop a business plan, learn basic accounting skills, agree to save 10 percent of the loan amount, then repay their debt within four months.

And accepting the responsibility necessary to meet those requirements, says Valle, builds self-esteem faster than it builds a bank account, transforming the women's attitudes about themselves as it transforms their neighborhoods.

"I felt like we were dreaming big when we started," says Valle, who named his group Esperanza after the Spanish word for hope. "But I never dreamed it would be what it is today."

What it is, says the Dominican government, which recently honored Valle with a presidential citation, is the country's largest provider of loans to the poor. And it's about to get larger. In the past few months, the group has been asked to join a nationwide effort to aid Dominicans infected with HIV, has paired with Major League Baseball and Nike on a number of sports-related projects and been selected by the internationally renowned bank Valle modeled his group after to participate in a five-year program that will expand Esperanza's reach fivefold.

"We're entering areas that were never really on our radar screen," Valle says. "But the phone rang. Little things like that really help us have a broader impact, not just as a microfinance group or not just as a health-care group -- but as people who are really within a community adding something to it."


Children's begging led Valle to vow to help them one day

Although he didn't know it at the time, Esperanza's first seed was planted in 1985 when Valle, struggling to gain a foothold on his baseball career, made his first trip to the Dominican to play winter ball. Standing outside a ballpark with his wife and 4-month-old son after a game, Valle and six other U.S. players were approached by a bunch of kids they thought wanted autographs.

"But . . . they were asking us for food," Valle says, still shuddering at the memory. "They were 5, 6, 7-year-old kids. And almost all of them were shoeless. Most of them were shirtless. It's 11:30 at night and the kids are going through the garbage trying to find food.

"It was just something that I saw that I could never imagine my own son having to survive in a circumstance like that. We just said if we ever are in a position to come back here and make a difference, we were going to do it."

A half-dozen years later, after Valle had become the starting catcher for the Seattle Mariners, his Cuban-born wife Vicky reminded him of the scene -- and his vow to do something about it. So the family returned to the Dominican Republic on a seven-week fact-finding tour, then shared what they'd learned with Fred Gregory, president of the development agency World Concern.

For Gregory, the answer lay in the controversial work of Muhammad Yunus, a Bangladeshi economics professor who argued that traditional macroeconomic aid projects that spend millions in developmental funds on dams and roads did little to help the most impoverished. In response, Yunus founded the Grameen Bank, a trust bank that made loans as small as $50 -- known as microloans -- to groups of borrowers too poor to get money from commercial institutions.

Valle founded Esperanza on the same concept. Before applying for a loan, which can range from $35-$135, borrowers must organize themselves into Banks of Hope and develop a business plan detailing what they plan to do. Loan recipients are also required to save 10 percent of the loan amount as a cushion that is deposited in a commercial savings account.

Staff members assist the borrowers, most of whom are women, with developing their plan and teach them basic accounting, banking and business skills.

The borrowers then have four months to repay their loans at 3 percent interest -- nearly 1/100th the normal loan-sharking fee in the Dominican -- and if one bank member defaults on her loan, every member of the bank is responsible and no one can apply for a new loan until the old one has been repaid.

That group dynamic is key to making Esperanza work, says Valle.

"When they receive those loans, it becomes a personal responsibility -- [but] they're not just trying to do something for themselves," he says. "Because the money was loaned to the bank, then the bank disperses to each individual person, each person is corporately connected to the others that are in their Bank of Hope. So there's an aspect of accountability and peer pressure that helps to be a motivating factor in the success of the program."

As a result, nearly 98 percent of the loans Esperanza has made since 1998 have been repaid. And the reason most of its 143 Banks of Hope have been successful, Valle says, is because the women have used the money to provide specific needs to their neighborhoods, selling baked goods, juices or second-hand clothes.

"Many people think poor people are ignorant," he says. "They may not be able to read or write, but they are far from ignorant. They know the market niche of each of their communities, and it's the entrepreneurial spirit that's in each of these people that they see a need in the community and then they fill it with their business."


Family buys and sell produce; beauty-shop owner thrives

In Batey Experimental, a tiny community carved out of the cane fields outside San Pedro de Macor�s, Anita and Seneida Mart�nez are part of a bank called Oasis. The steep decline in global sugar prices has had a devastating effect on the mostly Haitian cane cutters who live in the bateyes, where more than 8 in 10 are unemployed and even those who have regular work don't earn the $100 a month the government considers the poverty line for a family of five.

But Anita and her mother are among the lucky ones. Their Esperanza loan has allowed them to buy and sell yucca, bananas and other fruit from a tiny market run out of Seneida's home. And their membership in the bank has given them access to medical care unavailable to most poor Dominicans.

Across a two-laned paved road in nearby Quisqueya, Juana Jimenez Sabino's tiny beauty shop is doing so well, she has hired others to help out and used a subsequent Esperanza loan to buy a tiny generator, allowing her to keep working even during the frequent power outages that plague the area. Now Sabino, a mother of six whose smile lights up the one-room shop that has taken over the living room of her small plywood shanty, wants to go to night school.

"The important thing is how they've changed, how they feel now compared to how they felt before," Jenny Gerardo, an Esperanza loan officer, says of the women she has worked with. "They couldn't express themselves. They were timid. Now they're still humble, but they're not afraid to express themselves. They're taking charge of their lives."

A little further up the road, in a maze of dirt streets called Barrio M�xico, Ana Reyes is telling how she didn't join Esperanza for herself but for her son, who has suffered from severe mental retardation as a result of an accident during birth. Through her participation in the bank, not only has she received loans that have allowed her to work selling clothes out of her house, but she has also received access to a nearby clinic, which Esperanza runs out of a former college dormitory in conjunction with the Episcopal Church. As a result, she can get the one-hour therapy sessions her son needs for $1.50 rather than the $15 she had to pay before.

"He's needed therapy since he was born," Reyes, who has been with Esperanza three years, says of her 20-month-old son, Randi. "I don't have the resources to get him therapy and for that I'm thankful for the help Esperanza has given me. I've never even heard of another group like Esperanza."

But, Valle says, the prime example of how Esperanza can change an entire community rests in 41-year-old Mil�n Tapia, who worked making clothes in a sweatshop before the group loaned her enough money to buy a beat-up sewing machine four years ago. Her business quickly grew from one that produced simple clothes for her neighbors to one that turned out high-end custom-made wedding gowns and quincea�era dresses, netting her more than $240 a month -- more than enough to buy the notebooks, pencils and other supplies she needed to open a school in her living room.

Now she sews at night and teaches 65 neighborhood children -- many of whom would never learn to read or write without her -- during two daily sessions.

"That ripple effect just runs across an entire community," says Valle, 43, who retired as a player in 1996 and now calls Mariners games for Fox Sports Northwest while running Esperanza out of donated office space in a Seattle suburb.

"The thing that always brings me back is, before us, what was there for these people?" he continues. "What did they do? To me the greatest power, the greatest thing that Esperanza does is it implants vision in people who before didn't have a vision in their lives. It was more 'How am I going to get through today?'

"Today if you talk to some of the borrowers, they're dreaming, planning."