"Teresa" struggled to make a living by baking bread in a mud oven, but with a loan from ACCION International, a non-profit microfinance organization, she was able to buy more ovens, increase her customer base and earn money to send her children to high school.
"She had really become a forward-looking and inventive entrepreneur," said María Otero, president and CEO of ACCION International. "Like her, there are millions."
Otero received the 2007 Notre Dame Prize for Distinguished Public Service in Latin America yesterday for her leadership at ACCION, which, along with other organizations it has created, has given loans to about three million people like Teresa.
Otero was presented the award by University President Father John Jenkins at a dinner in the Main Building on Monday night.
"[I admire] Otero's vision and her leadership to empower those without access to anything," said Tara Kenney, a 1982 Notre Dame graduate, who nominated Otero for the prize. Kenney is on the Board of Directors of ACCION.
Notre Dame's Kellogg Institute for International Studies awarded Otero the prize, which was established in 1999 with funding from the Coca-Cola Foundation, according to the Kellogg Institute's Web site.
Interim Director of the Kellogg Institute Edward Beatty said prize recipients must be Latin American and have contributed to human welfare in Latin America. Otero was a strong candidate, he said, because she can work with influential political and business leaders, as well as the impoverished entrepreneurs ACCION assists.
"She has the ability to connect with people in the highest places in society and people who are marginalized," Beatty said.
Otero's interest in ACCION began when she was working with women in Africa and saw they needed to make money for themselves. She wanted to join an organization that helped poor people become self-employed and founded ACCION, where she has worked for the past 20 years.
"When you go to some of those really poor villages, it became clear that women need to earn some money, to be able to work, to really look after their families," she said.
ACCION began using microfinance to help the poor in 1973, Otero said. Microfinance institutions provide loans for people who normally would not be eligible for the credit they need to obtain capital for starting small businesses.
Money lenders would charge the poor unreasonable rates, sometimes loaning five dollars at the beginning of the day and expecting six dollars back at the end of the day. However, with ACCION's loans, Otero observed that about 98 percent of the entrepreneurs were able to make their payments.
"If [the poor] are given an opportunity, they will use the money in a productive way, and they will pay it back," she said.
Besides giving impoverished people a means to help themselves, Otero said microfinance institutions such as ACCION can create economically self-sufficient banks, since banks allow organizations access to larger amounts of money than donors have. She added that when ACCION first created a bank in 1992, it drew attention to microfinance.
"The amount of money that's out on the street in those loans [from organizations that ACCION created] is about 2.8 billion dollars," Otero said. "The only way you can get [billions of dollars] is to become a bank."
Otero said that microfinance has recently gained popularity throughout the world. The United Nations declared 2005 to be the International Year of Microcredit, and in 2006, Dr. Muhammad Yunus won the Nobel Peace Prize for beginning microfinance work in Bangladesh.
ACCION International also created a United States branch, ACCION USA, which helps small business owners in the U.S.
"We did this because it became clear to us that there were impoverished pockets of the country," Otero said.
Senior Michelle Mas interned at ACCION USA last summer as a loan officer. She said although the U.S. appears to be wealthy, it is often difficult to start a small business. However, Mas added that small businesses can help families improve their lives.
"I think this is the best way to go if you're an immigrant," she said. "You can help your family, help yourself up. Isn't this what the American Dream is all about?"
Otero next plans to expand ACCION in Africa and India and to make the loan process faster and cheaper.
"I had worked in Africa and Asia and thought, 'We have to go there.'" she said. "There's such a need."
ACCION, however, has experienced difficulties in some countries, especially when laws impede setting up banks.
"Sometimes [the countries] don't allow you to set up a bank like this, but more importantly, they take forever," Otero said. "It took us two and a half years in Nigeria to set up a bank, and the bank in the first two months had a thousand clients. The laws for the central bank are poorly developed."
Otero received $15,000 for her prize, with a matching $15,000 for a Latin American charity, and she will give the matching funds to the Organization of Youth Empowerment (OYE), which operates in Honduras.
Justin Eldridge-Otero, Otero's son and an OYE co-founder, said the organization concentrates on educating orphans in Honduras so they will be prepared for life when they leave the orphanage.
"This coming year, we're going to have our first two graduates, one in engineering and one in psychology," Eldridge-Otero said. "The ultimate goal is to get these young women to go to college and reverse the cycle of poverty that's been afflicting their families forever."
