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Short History of a Rotary Microcredit Program
Category: Microcredit | By Steve, 11-Jan-2018 | Viewed 1707  Comments 0 | Source Judy Cochran & Steve Rickard
Baker Client in Honduras

A vision

is how this Rotary project started six years ago as most Rotary projects do - with a vision to transform the recipient's lives by freeing them from endless cycles of poverty.

But how to make a difference?

The difference is made through small affordable business loans which lend a hand up and not a hand out. The visionaries wanted to make a difference in Honduras, the third poorest country in Latin America where an unacceptable (65%) of the people live below the poverty line. The originators designed a multi-year, multi-partner and multi thousands of dollars type project. In 2012 the goal was to raise, over 10 annual Phases, $1.0 Million USD. Fast forward to 2018 and the multi-partner aspect has come alive. Rotarians from Honduras (the Real de Minas Club), Alberta, (ten clubs), Ontario (three clubs), and the US (two clubs) have successfully implemented the first 4 Phases and Phase 5 of HECD is well underway. Both the current phase (5) and an earlier phase (2) contain a water project that has a microcredit boosting effect.
Water comes to the Village

Matching Donations is the key.

Thanks to generous donations from Rotarians, their clubs plus Provincial (Alberta) and Federal (Canada) matching grants, the system of Rotary Global Grants was able to generate $1.4 Million USD and impact over 4,500 lives in Honduras through microfinance and sustainable water projects. We have surpassed our goal and we can match the amount raised in the next five phases!!!

The program's backbone is the Team.

Following Rotary's model of selecting annual leaders (ensuring fresh ideas and renewed energy) and through successful phase completion, the hard-working team joined forces with a strong implementing partner, Opportunity International Canada. Through a thorough vetting process, D5360 Rotarians chose Opportunity International Canada (OIC) as the Canadian contact and they in-turn brought in their partner in the field - Institute of Development in Honduras (IDH). Together the Team began to leverage resources, tap into much needed expertise and experience to increase the scope of impact and ultimately guarantee our success. And by golly it worked.

Commitment of all Partners necessary.

OIC has come alongside Rotarian's fundraising efforts with an additional donation of $500,000 USD. IDH has 40 years of experience in providing holistic microfinance to the people of Honduras. IDH provides training to their clients in financial literacy and small business management as well as access to savings accounts and micro-insurance. Microcredit borrowers typically fall below the sights of traditional banking and frankly this is OK for our borrowers who are intimidated by the forms, procedures and types of collateral. The unsavory alternative to traditional banks are the dubious practices of Loan Sharks who have usurious interest rates and ruthless collection policies. 
HECD Client with Corn Mill

What a difference a loan makes.

After six due diligence trips to Honduras the life changing impact of small loans are obvious and wide spread. Statistically, over 60% of the loans go to women who create small businesses to improve the lives of their family children and aging parents. Collectively the repayment rate is over 97%. The Insight Trip's coordinator, OIC can point out how life changing this is for the people who truly need and welcome a helping hand up.

Impacts through expansion.

Working as a team we have created a microfinance branch in Santa Cruz and Santa Barbara as well as providing loan funds. Most of the funds go to helping those at the bottom of the socioeconomic pyramid. In addition, villagers in Las Camelias and Quebrada Chiquita now have sustainable fresh water projects in their villages which has vastly improved their health, their food and yes, even their education. It turns out the government built a school for the community only after they installed a fresh water supply. 

We are well underway to launching Phase 5 by summer 2018 which will create a round of loans to yet another new IDH microfinance branch, this time in Puerto Cortes. A focus of the microcredit program will be job creation through loans to Small to Medium Enterprises (SME). A water project will be conducted alongside the SMEs but under a separate Global Grant. The impact of our partnerships and the leveraging of the Rotary Grant process reminds us of how much can be done when we work together. With our help what will Honduras look like in the coming years?

Judy Cochran - Calgary West - judycochran@shaw.ca
Steve Rickard - Calgary West - steve@rickard.ca
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