Jannalee Anderson is a prodigious writer,

skilled team builder and has a huge heart for the people of Honduras. She has penned a comprehensive July 2017 report and a shortened 5 page format for the general audience. This article is an extract from that report - on the Small to Medium Enterprise Loan technique used in longer served  microcredit based communities:

The Small to Medium Enterprise (SME) Product Line

HECD Phase 4 has raised funds designated towards the Santa Barbara SME loan portfolio. This is filling a critical need in Honduras and we thank you for it!

What follows is a combination of the SME updates in both the December report and this July
report. This provides context in case the December report cannot be referenced or in the case
the Appendix is a stand-alone, removed from the longer July narrative.

SME loans:

At the upper end of the client continuum,Institute of Development in Honduras (IDH) has identified an "unattended market". "Small-SME" (small and medium enterprise) clients, locally known as "Micropyme" clients, who are the backbone of many developing-country economies. These clients have a business already and need a slightly larger loan to grow it. Their loans average $5K USD and are typically too large to qualify for traditional microfinance loan, but too small to qualify for a loan from a national bank - thus, they are left "unattended". 

IDH recognizes the value in serving these clients: first of all, larger loans (relatively-speaking) help IDH maintain its sustainability, and secondly, while not everyone is an entrepreneur, everyone does still want to work, and helping grow SME businesses promotes growth and generates jobs. SME's fill the economy's "missing middle" and are crucial to providing jobs for others in their communities. As more jobs are created, more income is made, the community's purchasing power increases, other spin-off businesses are created due to demand, and the whole community prospers in the long-run. The Chinese Proverb that says, "a rising tide lifts all boats" is a great visual as IDH grows this segment of the market.

While IDH has been quietly serving this target audience for a couple of years, it is prioritizing the growth of this segment throughout 2017 and 2018. 

Mario Amador

(pictured to the right) heads up IDH's SME Initiative and we met with him in person when we were there in April.

As of this spring, IDH has 927 SME clients and ten SME loan officers. By the end of 2018, they plan to have 20 SME loan officers - with at least one at each branch location. SME  clients generate jobs and each of IDH's SME clients have 3-6 employees. An average SME loan is $5K USD, for a 30-month period, and statistically creates 5 jobs over that time. IDH's CEO said that in an SME-driven community, where SME loans are available, it is possible to create 100% employment in a country where 50% unemployment is the norm. 

This is truly transformational.

The shorter July 2017 report on the HECD progress in Honduras is available here:
http://ragm.org/docs/Honduras%20Report%20-%20July%202017%20-%20Rotary%20-%20shortened_295.pdf


The full HECD July 2017 report is available from Jannalee Anderson: (janderson@opportunityinternational.ca)