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Housing microfinance story series: Auxiliadora Baltodano

March 15, 2010




Monthly Income, gross: **US$800
Monthly Income, net: US$450
Monthly Remittances: US$370-650
Source of income: Remittances, small business
Loan amount: US$1,700
Term of loan: 24 months
Monthly payment range: US$72-92

Four generations of the Baltodano* family live under one roof in their home on the outskirts of their town, a home built through the family’s own labor, savings from multiple businesses, and remittances from family members abroad. Auxiliadora Baltodano, a 45 year-old-woman with a commanding presence, is the head of household. She proudly relates stories of how her family got to where they are now. Her mother is the oldest generation living in the household, having moved there after giving birth to thirteen children, five of whom did not survive childhood. Also living in the home are four of Auxiliadora’s children.

Auxiliadora’s oldest son has lived in the United States since 2002. Now 23, he was only 17 when he left Nicaragua, lured by the potential of new work opportunities in Los Angeles. The family borrowed money for his passage to the U.S. – about US$6,000. José Luis was received by extended family when he arrived, and immediately found work in a restaurant. He now works in construction, and is married to a Nicaraguan woman. They have a two-year-old daughter, whom Auxiliadora has never met.

Auxiliadora’s husband, Diego, migrated to the U.S., she says, “not for money, or any reason but to see his son.” He went illegally, crossing the U.S.–Mexico border to join his son in Los Angeles. She remembers the exact date he left: February 25, 2006. His passage was primarily funded by his son. He now lives with his son’s family and works in construction, his trade in Nicaragua. Sometimes he works on the same jobs as José Luis. Auxiliadora says that he will soon return to Nicaragua.

The father and son send joint remittances, typically US$200-400 a month. They also have sent extra remittances to pay for medicine and educational costs–the most recent example being US$1,000 to cover an operation for Auxiliadora in a private hospital. Her daughter also receives about US$100-150 a month from her boyfriend in the U.S.

Aside from progressive home improvement, remittances have helped to fund the purchase of two properties, one which cost US$1,000, and another US$1,700. One of these will be the site of Rafael’s future home, the other a rental property. Both plots are currently undeveloped land.

Remittances from Auxiliadora’s son also helped to purchase dairy cows, whose milk now provides a source of income for the family. She recently purchased a tractor trailer with her son’s help, and is currently analyzing how she will “put it to work”–maybe by hiring a driver and an assistant and doing transport to a local market. According to Auxiliadora, she makes all decisions about how remittances will be spent.

Remittances are only part of the household income. Auxiliadora’s entrepreneurial zeal is evidenced by her frequent refrain, “poverty is only a mentality.” She recounts that the family derives income from four main sources: milk, ice, ice cream and tamales sales, as well as an ironing service.

Auxiliadora estimates a total monthly income from these enterprises of over US$1,200, a figure that far exceeds the US$452 in monthly income listed in her file. Auxiliadora related that all members of the family contribute to paying for food and basic costs, which average US$200-300 monthly, and take care of other expenses individually.

The evolution of Auxiliadora’s house
The family has applied the same entrepreneurial zeal to the construction of their home over the past two decades. When they arrived over twenty years ago, it was undeveloped land, without electricity or other service. According to her mother, it was also “full of snakes.” Only a handful of families lived there, carting water from blocks away and slowly raising dwellings from bare ground.

“The original home was very basic,” comments Auxiliadora. The family ate, slept, studied and rested in a single room. The house has since expanded in several directions, however. First bedrooms were constructed behind the base unit, followed by a patio area in front. Then walls were built around the front of the house to enclose a front yard area. Since her husband was a construction contractor, he and their son completed most of the work. Much of the money for these improvements came from savings and her husband’s earnings as a contractor.

Auxiliadora also used small loans to fund part of the improvements, taking on her first loan of US$1,500 (30,000 córdobas) in 2006. She had received a loan to invest in her business, however used this working capital instead for home improvements . The loan was used it to make improvements to the bedrooms. Later, she received two loans from another institution, for US$600 and US$1,875, also both intended to fund working capital for her businesses. She is still making payments on the second of these loans.

She found out about the Local Development Fund (FDL in Spanish) while she was waiting in line to pick up remittances. According to Auxiliadora, she always went to FDL’s office because the line tended to be shorter for remittances than other places. She spoke to an FDL staff person to assess her interest in a remittance-backed loan program, and was later interviewed as part of the market study. When the loan program was piloted, she submitted an application and in 2007 was approved for a loan of US$600. She paid off that loan and sought another loan in 2009 for US$1,700. She is still paying off the latter loan from FDL, in addition to the loan mentioned above.

Auxiliadora says that she has been satisfied with the experience of borrowing from FDL, and has liked the way that they treat her as a client. She comments that they are easy to deal with and do not “ask for too much,” meaning that they process her paperwork quickly and do not continually return to her with requests for new documents. For the first loan, a loan officer and a construction technician visited the house and helped her put together a budget for construction. She says that they came back to check on how the work turned out. She said a similar process occurred with the second loan, but only the loan officer came the second time.

Key points from Auxiliadora’s story:

  • This household had multiple sources of income, and did not depend solely on remittances, even though their remittance receipts could, potentially, have been enough to sustain them. The family utilized remittance income to make a number of productive investments, such as the milk-producing cows and, recently, the tractor trailer.
  • The home that emerged after several stages of improvements that had been funded by a combination of savings, remittances and loans, acted as a productive asset for the family. It provided a space in which the family could pursue various productive enterprises, ranging from ironing services to selling items such as tamales, milk and ice cream. In this sense, the direction of remittances toward housing improvements can be considered an investment that leveraged the creation of an economically productive space, and thus income for the family into the future.
  • Auxiliadora appreciated the utility of housing loans. Prior to coming across FDL, she even redirected non-housing loans towards home improvements. When they had the opportunity to take out a loan that was actually for housing, the family responded enthusiastically, especially since one of their major sources of income was from remittances. Without factoring remittances into their total income, however, it appears that the family may still have qualified for a housing loan.

Story and photos courtesy of Habitat for Humanity consultant, Brendan McBride.

*The names of the families have been changes to protect their identity.


**Gross income is the total of all income sources, whereas net income reflects the number of family members that are supported by that income. The calculation is made by subtracting from the gross income an estimate of the minimum cost of living (including food, transportation and education) for all family members.