Peru floods effect thousands of microentrepreneurs

Five days of heavy rain has caused devastating floods to the region of Cuzco, Peru. The flooding, which occurred at the end of January, originated in areas at the banks of the Huacarpay Lake and the rivers Vilcanota, Huatanay, and Lucre. 10,000 houses in urban and rural areas are uninhabitable and countless cultivations, farms, railways, and roads are ruined. Many bridges - such as those that lead to Pisac and Ollantaytambo - were swept away.

While the international media focused its attention on the evacuation of tourists from Macchu Picchu, little was said about the effects of this natural disaster on the local population. It is estimated almost 18,000 hectares of grasslands and cultivations of potato, corn, wheat, and barley were damaged or completely lost. If this estimate is accurate, around 38,000 men, women, and children are now deprived of their main source of income.

Following the news of the floods the Peru Oikocredit office, based in Lima, was immediately in contact with its three project partners working in the Cuzco Region: Microfinanzas Arariwa (17,549 clients at June 2009), MIDE, Microcrédito para el Desarrollo "La Chuspa" (7,471 clients at December 2009) and Edypyme Credivisión (12,150 clients at December 2009). They reported on the situation and how it impacted on their clients. 

Through the country and regional staff in Peru, Oikocredit will continue to closely monitor the developments of its MFI clients MIDE, Credivisión and Arariwa.

In spite of the difficult circumstances, staff of these MFI partners are visiting communities and towns attempting to evaluate the scope of the damage. Some have responded to this situation by refinancing or rescheduling debt or providing a two to three month grace period. These measures will give clients time to recover from the disaster and rebuild their lives and businesses.

Emergency relief to most affected families

Due to the magnitude of the disaster, Arariwa's initial focus was facilitating humanitarian aid to the thousands of people in Cuzco, many of them clients of Oikocredit's MFI partners. Food, medicine and shelter are scarce and roads are damaged, making it very difficult to monitor and assess the situation. 

Microbusinesses damaged or underwater

MIDE clients - mostly women's solidarity groups - living in rural communities in the provinces of Anta, Urubamba, and Quispicanchi were severely hit.

In Anta, 75% of cultivations were lost and stagnant water on grasslands has become a risk for rural communities and their cattle. Dairy plants have been seriously damaged and milk cannot be processed nor transported. In the Piñipampa area, where a significant number of MIDE female clients live, 60% of the kilns were destroyed which will seriously affect the production of clay tiles and bricks.

By the end of January, more than 400 clients of Credivisión reported losses and damages. This MFI's clients have businesses such as brick and tile factories, handcrafts, bakeries, small restaurants or are small vendors - vegetables, clothes or groceries.