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What could Service Above Self look like in the country of Honduras?
Category: Microcredit | By Editor, 12-Sep-2012 | Viewed 2832  Comments 0
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Mayan Stelae, an emblematic symbol of the Honduran Mayan civilization at Copan.
One Hundred and Fifty Thousand Dollars for Microcredit in Honduras goes a long way. That's why D5360 Microcredit Task Force and Opportunity International, Canada have partnered to expand microcredit and financial services to Santa Cruz de Yojoa, 2.5 hours outside of the capital city of Tegucigalpa, Honduras.  In the accompanying summary article, you can read about borrowers that continue to borrow from the folks that had faith in them when no one else did.

If you or your Rotary Club wish to join in the matching funding for this project please contact the Microcredit Task Force Chair, Wally Gardiner, Pres. Rotary Club of High River, Alberta (gardinercomputer@shaw.ca). The Airdrie Rotary Club is playing a major funding role, guiding donations from various clubs and applying for the Rotary Foundation Global Grant. For those who like to see the projects first hand, we also have an Insight Tour to the microcredit banks in Honduras plus a visit to the 19th year of the Central American Project Fair called Uniendo America. 

Service Above Self - in Honduras



What could Service Above Self look like in the country of Honduras?  

Travel in your mind's eye to Central America, and Honduras specifically - a country of eight million people, and the second poorest country in Central America after Haiti.  65% of its population live below the poverty line where there is a high unemployment rate, as well as underemployment rate.  If you stepped out onto the streets of the capital city, Tegucigalpa, or travelled out into one of their provinces, called departments, and asked an average person on the street what they want - they would answer you directly with "a job."

Hondurans are hard-working, warm, and creative people - but many do not have access to appropriate financial services and so are forced to either borrow from dangerous loan sharks who charge exorbitant interest rates, or just go without. 

Enter microfinance - a dignified option, which runs on a business model, is sustainable, teaches stewardship, creates dignity and grows hope.

Opportunity International is one of the leading microfinance organizations worldwide with implementing partners in over twenty countries in the developing world.  Opportunity provides holistic microfinance to its clients through offering not just loans, but also savings accounts, training, and micro-insurance.

Institute for Honduran Development (IDH) is the Opportunity International Implementing Partner in Honduras and has been providing microenterprise development programs to thousands of poor entrepreneurs since 1974.  IDH is poised for growth and would like to expand their services in the areas of Santa Cruz de Yojoa, 2.5 hours outside of the capital city of Tegucigalpa.  IDH began operations in Santa Cruz in 2010 and has a strong management team in place with a client base that currently boasts a zero percent arrears rate in their loan portfolio.  This team is ready to grow and partner with you!

The proposal submitted for Rotary's consideration targets growth in Santa Cruz de Yojoa at three fundamental levels of clients and would cover the expansion costs to grow into the area, as well as the loan portfolio funds for a minimum of 400 people, indirectly benefiting up to 2000 people a year!

48% of the loan fund would be designated to reach the poorest of the entrepreneurial poor, served by Opportunity's Trust Group methodology.  Without microfinance, these clients would be forced to scratch out a dangerous living.  Although asset-poor, they are hard-working and loyal to each other and as such, Opportunity's Trust Group methodology utilizes "character-collateral" to ensure high repayment rates.  Trust Group clients start out with small loan sizes of between $50 - $200, and meet weekly in their Trust Groups for a four-month loan cycle.  Each week their Opportunity loan officer provides them with interactive training and they pay back 1/12 of their loan.

As clients' businesses grow, and they repay back their Trust Group loans successfully, they are permitted to request a larger loan size if required for their business.  As the loan sizes progress over $250, the clients graduate to the next level and join a Solidarity Group.  These are smaller groups of clients who may have different businesses, but have similar loan sizes.  At this level the loan cycle is six months, with bi-weekly meetings, and asset collateral is required.

As IDH clients continue to grow their businesses and succeed, they typically want to stay with IDH, not because they couldn't get a loan at a National Bank now, but rather out of loyalty to an organization who believed in them when no one else did.  While this is a proportionately small number of clients for IDH, since it is not their target market, it is still an important group for the financial sustainability of IDH as an organization.  Many of these clients have loans in the $700 - $1000 range.  The loan cycles for these clients now range from one year to two, and they receive full-day training semi-annually.  The businesses are larger at this stage, most of these clients are able to employ others, and thus the training needs to change accordingly. 

The Rotary investment of $150K will fund not only the loan portfolio for these individuals, but also the loan and transformation officers needed to ensure holistic microfinance is provided.  Statistically, the project will aim to reach a minimum of 400 clients - 80% of whom will be women.  These clients will in turn positively impact an additional 2000 family and community members, and thus the positive ripple effect of holistic microfinance begins, personal dignity is restored and communities prosper. 

This strategy promotes diversified business growth, teaches sustainable stewardship, and invests in hard-working creative entrepreneurs determined to make a better tomorrow for their families and communities.  This model will not only impact Santa Cruz de Yojoa, but is also scalable for roll-out throughout Honduras.

Jannalee Anderson
Opportunity International, Canada.

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Opportunity International
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