MICRO CREDIT

We received funding to do a micro no- interest loan project with the women in San Jorge.

Our microcredit program is simple: we give a loan, deduct Q10 for paperwork costs, and the women pay back the loan interest-free over 10 months. Our largest loan is Q990 ($132), paid back at Q100 monthly. No-interest loans are controversial in the world of microfinance. Here is our position. These families are extremely poor. The best thing we can do is to give them an opportunity to help themselves by financing businesses that supplement family income. The fact that they can pay back a loan's principal is the first step, and later, if their business grows we can worry about interest.

The money has to be used to either start a small business or enhance an existing one.

Many of the women make jewelry or weave so they have taken that money to invest in their business and to be able to buy their merchandise at wholesale prices.

One woman has started a small goods store. Another has bought two blenders to start a juice stand. Another to invest dry goods into her already existing stall. Another to buy a stove for her tortilla business.

Our survey found that these home-based part-time businesses increase family income by 38 percent on average. The most successful business averages daily sales of Q30 ($4, the exchange rate is about 7.5 Quetzales = $1). What are these women doing with the income from their businesses? They are feeding and clothing their families, sending their children to school, saving to improve their houses, and growing their businesses.

So far we have had a 100% payment return. One of the advantages of this project is that the women have had to learn how to use the banking system. The repayments are made directly into an account at the bank so the women have had to become familiar with filling out deposit slips. For many women this was the first time that they have ever had to enter a bank.

We have many women waiting who want to participate in the micro credit loan.