Ricardo Soto involves children, parents, teachers, and municipal authorities in the management of a revolving micro-credit fund that supports education and increases school enrolment for rural children in Peru.
Ricardo is addressing rural children’s lack of access to education through a combination of micro-finance, a focus on culture, and child and community empowerment. He has created an innovative revolving fund for parents to take out loans to pay for their children’s school-related costs, including fees, uniforms and supplies, to be repaid with minimum interest throughout the year. By eliminating the financial excuse parents use to avoid sending their children to school, Ricardo is at the same time changing cultural patterns of low education rates in rural areas, especially for girls. Ricardo is able to make such a shift in cultural norms because he involves all relevant community members, especially school children, in creating change. Committees of school children choose loan recipients, for Ricardo feels that they are well placed to understand the particularities of each family within the community. Parents who receive the loans gain a sense of ownership of their children’s education, ensuring a commitment which has resulted in a zero percent delinquency rate on loans in the three years in which the revolving fund has been in operation.Ricardo has engineered his revolving fund according to a deep understanding of local context, structuring the fund as part of a complete package which systematically addresses most of the obstacles, cultural and bureaucratic, that prevent children from going to school. For example, Ricardo allows parents to repay their loans with work or farm products, an essential flexibility in an impoverished rural environment. He has also seen that the best way to ensure the fund’s success is for children to monitor its implementation, because communities accept children as non-threatening watchdogs. The revolving fund is completely sustainable within each school where it operates, and in fact grows steadily to fund an additional child every year in every school, so it is easily replicated with sufficient start-up capital.
In Peru, 47 percent of rural boys and 85 percent of rural girls do not have access to basic education. This is a problem with enormous implications for the country, including elevated poverty rates, lack of civic participation, high illiteracy rates, and continuing gender discrimination. Most often these rural children do not attend school because their families lack the financial resources to pay for materials and other fees. In Huancavelica, the poorest rural region of Peru where Ricardo has done much of his work, families struggle to provide food for their families and need their children to work the land and care for the animals. In the case of girls, the economic problem is compounded by a pervasive cultural belief that it is more important for boys to be educated, while girls are best suited to household tasks and should be taking care of the home instead of attending school. If a family can afford to pay school fees for one of their children, it will usually be a boy.In order to address the gender bias in access to education, networks of civil society organizations have successfully campaigned for a national law providing free education to rural girls. The law was approved by Congress and ratified by the President in 2003 by popular demand, but has not been implemented by the government because of a supposed lack of resources. Many people believe that in reality, public officials are not interested in improving education in Peru, instead prioritizing the more visible infrastructure projects that will earn votes and recognition. Even if the government carried through with this law, poor rural families would still not have the resources to pay additional expenses in sending their girls to school, including uniforms, shoes, books, and other supplies. Neither would the law encourage families to make conscious decisions regarding their children’s education. It is only when parents consciously prioritize education for their daughters—as well as their sons—that tables are turned and cultural norms can be shifted. Furthermore, such a shift requires the involvement of not just parents, but all community members with a role in education, including children, teachers, and municipal authorities.
Ricardo’s revolving fund, tested in several local pilots and ready for national expansion, is a relatively simple loan system that is structured to answer an array of economic, cultural, and bureaucratic obstacles to school enrolment for rural children.The revolving fund has an uncomplicated premise: parents borrow money at the beginning of the school year to pay for school fees and other related costs, usually around US$35. In order for the micro-credit system to work, Ricardo has added an essential twist: parents who absolutely do not have money to repay their loans are able to pay either in kind, with farm produce, for example, or with work for the school district. The minimal interest on the loan that groups of parents repay throughout the year allows the revolving fund to finance another child the following year, and so on. In 2003, the first year of the fund’s operation, 80 children at eight public schools were granted loans, or ten children per school; in 2004, 11 children per school; and in 2005, 12 per school, for a total of 96. The sustainability of the fund means that all that’s required to start it up in different locations is a minimum amount of seed capital. Ricardo began the revolving fund in eight pilot rural public schools in 2003 with a grant of $5000, of which $3000 was used for the loans and $2000 for preparing a handbook and other administrative activities. Currently, all eight revolving funds run on their own, supported by Ricardo’s organization only with follow-up and coordination, but not money.In order to change pre-existing cultural patterns, Ricardo feels it is critical to have the participation of all community stakeholders in raising rural education rates—especially children. One innovative and extremely effective aspect of Ricardo’s fund is that committees of children at each of the schools are responsible for choosing, based on need, the loan beneficiaries, and monitoring the parents’ commitment to their loans. This idea originated in Ricardo’s insight that children are most knowledgeable about the reasons behind other children in their communities not attending school. This system not only encourages leadership and positive action among school children, but it has also proven remarkable in the positive relations it fosters between the children and the families who receive the loans. Furthermore, children are accepted and efficient regulators of the fund within the community: they notice and do not hesitate to report when loan recipients are not wearing appropriate clothing to school, for example, an indicator that parents have not spent the borrowed money on their children. Present in every classroom and in every school, children are positioned to see everything that happens. The child loan recipients themselves are also key enforcers of the loan being used for its intended purpose, empowered with the knowledge that they were chosen by the community, and therefore have a right to education.To ensure proper use of loan funds and shift cultural thinking, parents who accept the revolving fund loan commit to leaving their child in school for the entire year, signing a contract attesting that they will use all the loan money on their child’s education. Overwhelmingly, parents accept the loan when their child is chosen. So far, parents have demonstrated incredible commitment to the revolving fund: in three years of operation, there has not been one case of either delinquency in repayment or of a loan recipient failing to attend school. By putting forth an effort to repay the loan, rather than having the school fees waived, parents are making a conscious decision to send their child to school. This ownership over their children’s education implies an important cultural mind-shift, especially when parents choose to send their daughters to school. The commitment is enhanced by Ricardo’s requirement that they attend his “school for parents,” which teaches parents how to be more involved in their children’s education and gives them tools to support their children’s educational growth. Ricardo has understood that he can use financial means to reach cultural biases against education for girls, as parents have a hard time justifying the exclusion of their daughters from school once the financial barrier is removed. In reducing the inequality in access to education for girls, Ricardo is also setting the stage for a more profound cultural change in gender discrimination.Other community involvement comes from teachers, principals, and relevant municipal authorities. While the committees of children are in charge of managing the fund, the teachers and principals of each school are active in overseeing it. Municipal authorities have formally recognized Ricardo’s project, and are involved in ensuring that parents are following through on their commitments to the loan and spending the money as intended, in some cases visiting the parents and asking them questions. Ricardo has also arranged to have the authorities provide free birth certificates to loan recipients, a requirement for school attendance.Ricardo’s next step is to replicate his pilot program in three strategically chosen communities across Peru. These include an indigenous community in the Amazon, an urban settlement of displaced peoples in a large city, and an impoverished rural community in the high Andes. Ricardo plans to support this spread with resources from his own organization and the church and municipalities of the Junin and Huancavelica regions. These locations and peoples are varied enough, he hopes, to test the model and make the best possible case in convincing the Peruvian government to adopt his revolving fund into national policy. Internationally, Ricardo is spreading his idea through Save the Children, under whose auspices he has trained communities in Bolivia. He hopes to do the same in other countries throughout Latin America.
One of eight siblings and son of farming parents that immigrated to the city, Ricardo spent much of his youth overcoming significant obstacles to his education and ambition. His father dissuaded his application for vocational school, and his application to the police academy was thwarted by a prejudiced examiner. In all of Ricardo’s persistent efforts, his mother’s support was essential, as she was determined that her children have the opportunity for education that she herself did not. Ricardo’s father wanted to send only his sons to school, as dictated rural culture in Peru, but his mother fought to send the girls also, and was not satisfied until all eight of her children reached higher education and became professionals.
Ricardo eventually enrolled in a social work program at university. During this time he became involved in left wing politics, labor unions, and working for the poor, especially with children. Returning to his hometown, Ricardo started an education program called “useful vacations” to improve rural children’s performance in school through fun, educational games on the weekends. A turning point in Ricardo’s life came when his brother was killed by a terrorist group, who put Ricardo’s name on their hit list when he denounced them at the funeral. He was forced to flee the town for Lima, where he took a job with the international organization Save the Children. This 3 years work experience opened his eyes to the potential of civil society, teaching him about project design, fund management, and many other practical strategies essential to his future organization. He also used his time in Lima to follow postgraduate studies. Ricardo dedicated himself to promoting the rights of children and education, and was eventually able to return home and pick up his program. The revolving fund is just one strategy in a stream of Ricardo’s constant innovations. Since 1984, he has worked through his organization, the J.M. Arguedianos Center, on various methods of improving child education. Ricardo has successfully implemented new ideas such as a school for parents and the countrywide establishment of child ombudsmen as community representatives in public schools.