Which would you be most likely to donate: your money, your time, or your stuff?
When Virginia Campo surveyed her friends, they overwhelmingly answered “stuff.” That’s when she had an a-ha moment. “I thought, what if I could solve two problems at once?” she says. “I could keep people from wasting or throwing away the excess items they no longer need, and I could help people who lack basic resources in the process.”
And thus a new model for social impact was born. Campo, 27, runs a nonprofit in Panama City called Hecha y Derecha. The idea is simple: individuals donate gently-worn clothing, Campo and her collaborators price them and sell them, and 75 percent of the money generated from the sales goes toward microloans for marginalized women throughout Panama (the rest of the proceeds are reinvested in the company).
Campo, who is Colombian but grew up in Panama, first learned about how small loans can provide a better quality of life for women in underserved areas while working as a fellow for the microfinance company Kiva in Kenya. Microfinance, which promotes financial inclusion by giving under-resourced individuals access to traditional banking services such as loans to start their own businesses, has been widely touted as an effective way to combat poverty throughout the world.
“Without the capital for raw materials, dreams often sit there and are unable to be built out,” says Catherine Cocke, Kiva’s portfolio operations manager. “A small loan can turn a dream into a business that could change the life of an entrepreneur and have ripple-effects through the community as jobs are created.”
While in Kenya, Campo witnessed the benefits of microfinance firsthand. “In the field I saw these loans not only empower one person to start something, but then that person would empower others to walk the same path,” she says. “It was mind-blowing. And I’ve seen it many times.”
Once the darling of international development, microfinance has faced criticism in recent years for its failure to have a meaningful impact on global poverty rates. One of the main reasons is lack of education: default rates can be high when loans are distributed to individuals who lack the skills to manage a budget or run a business.
“Microfinance absolutely cannot achieve tremendous results on its own,” Cocke says. “This is why many organizations are now providing wraparound services such as savings programs, business classes and health insurance.”
Campo is committed to making education a cornerstone of Hecha y Derecha. “I was lucky enough to have an education; I had all these privileges,” she says. “I don’t want to tell the women I work with what to do, but I do want to help them. I want to work with them and learn from them. We can learn from each other.”
Campo is currently raising funds through clothing sales, and word is quickly spreading through Panama City, where the resale industry has yet to take off. Hecha y Derecha plans to disburse its first loans, to women who live in the small town of San Miguel, this fall.
In addition to managing Hecha y Derecha with her small team, Campo runs the human resources department for the hospitality group Selina and coordinates Panama City’s “Under 30 Changemakers” network. Sitting in her living room, surrounded by boxes and racks of clothing, she admits she’s overworked yet exhilarated.
“It’s a lot of work, but I love it,” she says. “I couldn’t do it if i didn’t love it.”