WHO’S WHO IN MICROFINANCE: Dave Valle

Dave Valle, a former Major League Baseball player for the Seattle Mariners, is the founder of microcredit agency Esperanza, whose mission is to help the poor in the Dominican Republic and Haiti start their own businesses. In addition to making loans, Esperanza has become active in community development: creating a school, computer training centers, a member-funded health care plan, a water treatment system, and a home improvement initiative. The organization has also spearheaded the construction of five baseball fields.

The seventh of eight children, Valle was raised in Bayside, Queens. His father died of a heart attack suddenly at the age of 41, when Valle was only eight years old. His mother went back to work as a nurse covering the night shift so she could be home for her kids before and after school. Valle coped in part by playing baseball. By high school, Valle was playing third base as well as catcher. His brother John was drafted by the Detroit Tigers. His sister Barbara said, “His one dilemma was never ‘if’ he played professional baseball. It was, ‘What would I do if John is on the opposite team in the World Series?’ ”

Valle captured the attention of the Mariners, who drafted him in 1978 right after graduation and moved him to Bellingham to begin the long slog through the farm system.

He played for teams around the country and for winter leagues in Venezuela, Mexico and Colombia. By 1985 he was married, a father, and finally on the full-time roster playing for the Mariners.

The transition to running a microfinance institution in the Dominican Republic may seem odd. Dave Valle isn’t Dominican or even Latino, he is an Irish-Italian New Yorker. Nor did he speak Spanish very well at first. His epiphany occurred one night in 1985 waiting with his wife and infant son for a bus in Santo Domingo. He was playing in the winter league for the Dominican San Cristóbal Caimanes after an injury during a Mariner’s game had put him on the disabled list for three months. Some children approached him and he thought they were going to ask for an autograph but instead he found out they were hungry and begging for food. He and his wife paid a vendor at a nearby kiosk to cook up her remaining food and feed it to the children. Knowing that the food would only provide temporary relief, they vowed to do something more if they were ever in the position to do so.

The Dominican Republic has a population of 8.9 million people with approximately 4 percent living on less than USD 2 per day, according to information available on the Microfinance Gateway. 29 percent of the country does not have access to banking services. As of 2005, based on a report by the Inter-American Development Bank (IDB), there were 13 MFIs in the Dominican Republic with a combined portfolio of USD 158 million, serving 145,332 borrowers with an average loan size of USD 1,087.

Six years after Valle’s stint in Santo Domingo he received a lucrative three-year deal with the Mariners and his wife reminded him of those children. Esperanza, which means “hope” in Spanish, was established in 1995 with USD 30,000 of Dave’s and his wife, Vicky’s, savings. According to the organization’s website, Esperanza has since dispersed approximately USD 14 million through 78,000 loans, including nearly 17,849 active accounts in 2009. 87 percent of Esperanza’s borrowers are women. The organization offers short-term, low-interest loans ranging from USD 125 to USD 1000. Loan tenures range from four months to twelve months and pay interest of 3.7 percent per month and the average loan size is about USD 180. According to a 2007 annual report Esperanza had total assets of USD 2.1 million and debt-to-equity ratio of 0.99. Esperanza is not profiled on the MIX Market, the microfinance information clearing house.

“Traditional aid methods, handouts, haven’t worked,” said Pimentel, Esperanza’s executive director and a Dominican who previously worked for CARE in Somalia. “People have to take ownership of the process and learn to be responsible. That’s the key to our method. We’ll give the resources and training, but you need to bring the spirit and responsibility.”

Lending is organized around groups of women called a Bank of Hope. The groups of women agree to work together and support each other in their businesses and other aspects of community life.
Women qualify to be a part of a bank by:

Being truly needy, i.e., lacking the resources and collateral to get commercial credit
Completing a simple business plan
Having a good reputation in the community
Possessing a realistic concept of what it takes to make a business work, and
Offering a service or product, which meets a need in the marketplace.

Each member must have a business plan that is reviewed and approved by the loan officer. The Esperanza loan is made to the group. The women are all dependent on each other for their eventual success. If one member defaults on her loan, the group is responsible for paying it back.

All borrowers are eligible to participate in a pre-paid health insurance plan that Esperanza offers through a partnership with the Clinica Esperanza y Caridad (Hope & Charity Clinic). Each member can pay a fee and receive medical care at the clinic for the life of their loan. Esperanza also offers a life insurance program that its members can purchase at the time they receive their loan that will pay off their loans if they, their spouse, or children die.

As for the baseball fields, Esperanza secures land through long-term leases with the government, and it provides the expertise and project management skills to construct the fields. The community donates labor to build and, later, maintain them. Any child who participates in leagues and tournaments has to be enrolled in school. The vision is for fields to be part of larger complexes that might someday include vocational training schools.

Valle has stayed connected to baseball by doing color commentary for the Mariners. When he’s off the Mariners’ clock he spends almost all his work time on behalf of Esperanza, which began paying him a salary last year. “You start out and you want to be successful,” Valle said, “But once you do that, you want to do something that matters.”

By Laura Anderson, Research Associate

Additional Resources:

Esperanza: Home

Reader’s Digest: Major-League Baseball Player Helps the Impoverished Start Businesses

The Seattle Times: Fielding His Dream: From Faith, Family and Baseball Dave Valle Gleans the Good Life

Microfinance Gateway: Country Indicators, Dominican Republic

IDB: Microfinance in Latin America and the Caribbean, How Large is the Market? By Sergio Navajas and Luis Tejerina