Rural Development in La Ceiba

Rio Cangrejal & Pico Bonito national park

As La Ceiba geared up for its annual Carnival celebrating its patron saint, Isidore the Laborer, I decided to refresh my perceptions of the area by getting out into the field again. During the Carnival, thousands of foreign and national tourists arrive to partake in the festive celebrations.  La Ceiba is known as the ¨tourism capital of Honduras¨ given its proximity to beaches, white-water rivers, and national parks.  Moreover, the city’s nightlife district or Zona Viva holds the reputation as the best in the country. Although La Ceiba is rich in culture, nightlife, and natural beauty, many people who inhabit the city and the surrounding countryside are poor and lack opportunities to improve their quality of life.

I joined an Adelante Credit Officer to visit microloan recipients outside of La Ceiba in the municipality of El Porvenir.  La Ceiba’s early growth was propelled by the Standard Fruit Company, which exported fruit crops from the city’s port.  Agricultural exports continue to be an important feature of the economic landscape around La Ceiba, and El Porvenir is notable for its vast pineapple plantations.  The town also shares a shoreline with the Caribbean Sea, which attracts tourists, especially during Holy Week.  Without grocery stores, markets or commercial centers, many residents depend on La Ceiba’s city center for many goods and services, but with the spread of micro-entrepreneurs, this is changing.

Vilma & youngest daughter

Vilma has been a client with Adelante for four years, and is currently paying off a loan for L 13,000 or $684.  This energetic mother of four has three different business ventures: a small restaurant, convenience store, and merchandise stall.  Vilma has big plans for her micro businesses and hopes to bring better prices and a greater diversity of goods to her community.  In the future, Vilma would like to turn her small convenience store into a bodega or small supermarket and move it across the street to another piece of land she owns.  With the extra space, Vilma and her eldest daughter would like to start an internet cafe.  She also plans to use her next loan from Adelante to invest in more sandals and used clothes for her merchandise stall.  Vilma’s entrepreneurial spirit is inspiring and exemplifies how microcredit helps spur greater economic activity in rural villages.

Francisca, Adelante client

Farther along the highway and not far from the popular wildlife reserve Cuero y Salado, another client, Francisca, also illustrates the impact of microfinance.  Over the years, Francisca has succeeded in educating each of her four children, ages 15 to 23, thanks to the income earned from her micro enterprise.  This is an impressive feat considering she is a single mother.  On her property, Francisca runs a snack stall, and her two sons, who both graduated as mechanics, have a car and bike workshop.  Her youngest child is still in secondary school, and her oldest is a teacher at a local primary school.  Not only has Francisca earned a living in her rural village, but she has also helped her children to achieve an education and contribute to the local development of their community.

While La Ceiba is revered for its extravagant Carnival, natural splendor, and relaxed attitude, we must not forget the plight of the rural poor.  That’s why Adelante was founded in La Ceiba in 1999 and began disbursing its first microloans in 2000.  At present, the branch office in La Ceiba is helping more than 1,335 clients work their way out of poverty through small business loans.  Over the years, Adelante has given hope to thousands of women across Honduras, and it all started in La Ceiba over a decade ago.

Elodia, Then and Now

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It is rare to have the opportunity to report on a microfinance client’s progress over the course of several years through qualitative interviews.  At Adelante, our investment in personnel to document stories from the field has given us this worthwhile insight.  Four years ago, General Manager Sophia Anderson, was starting her career with Adelante as the International Development Coordinator when she met Elodia in the department of Choluteca.  Elodia shared with Sophia the challenges she faced before becoming a client and the goals she hoped to achieve after taking out her first microloan in 2007.

Elodia & son, 2009

Back in 2008, Elodia was producing tortillas and selling Avon products to members of her local community.  Five of her six children were living at home and her husband was working as a chauffeur.  Before receiving a loan from Adelante, Elodia could never invest much in her business since she lacked the necessary capital.  With her first loans, she was finally able to boost her micro enterprise, and her goals of renovating her home, sending her children to secondary school, and purchasing a car might one day become a reality.

Elodia’s new patio

Today, Elodia is paying off her second Individual Loan for L 25,000 or $1,316, and fills several large tortilla orders daily to regular clients.  She even attained a very lucrative contract to supply 3,500 tortillas a day to a hospital in Choluteca. No longer needing to reach distant communities, Elodia decided not to invest in a car.  Instead, Elodia used her first Individual Loan to buy a tortilla-making machine for L 5,000 or $263.  With her second Individual Loan, Elodia made a huge investment of 31,000 or $1,632, she explains, ¨I have accomplished a lot over the years, for example, I bought a corn mill so I can make flour, this allows me to save money and also gives me extra income because I can rent it out.¨ Thanks to Elodia’s booming business, the family renovated part of their home and built a new, covered patio with hammocks and chairs where her assembly group meets every two weeks.

Even though Elodia has accomplished so much, she still has many goals she would like to achieve in the future.  Elodia is hoping to see her children graduate from secondary school, especially since she earns enough income to support them.  She is optimistic that her youngest son, 10, will continue his education, and that her teenage daughters will eventually return to finish their studies.  Elodia wishes that two of her daughters would have waited until finishing secondary school before getting married and having children.  Elodia’s eldest daughter, 21, recently returned home after working in San Pedro Sula, and has just re-entered school in order to finish her diploma.  Elodia is adamant that she will encourage and assist any one of her children to attain a better education.

Elodia in her kitchen, next to corn mill

Two months ago, Elodia lost that very profitable contract with the hospital, so her business has hit difficult times.  Elodia is working hard to find new clients in order to replace lost income, but luckily she still has several orders daily of 40-50 tortillas.  In the meantime, Elodia uses her spare time to produce inexpensive jewelry.  While diversifying her business is important, Elodia is confident that she will soon be busy again with her tortilla enterprise; in fact, she has decided to make another big investment.  Before meeting Sophia, Elodia had constructed a separate kitchen for her tortilla business, and now three years later, she is ready to renovate it.  Elodia contends, ¨It’s important to always have goals, it never ends! I would like to renovate my kitchen in order to have a better work space.¨ To get started, Elodia plans to have a new, wood burning oven installed, which will reduce the quantity of wood and also eliminate in-house smoke pollution.

Meeting Elodia was an inspiring example of how much can change for one woman over the course of three years.  I hope in the future someone else will take the opportunity to look back on the client stories I have written and follow-up to see how the women are doing.  This qualitative material is invaluable in demonstrating the difference Adelante is making in the lives of thousands of women and their families.

Alleviating Poverty in the Lenca Corridor

A rural scene from Intibuca

In the Western highlands of Honduras, achieving the basic necessities in life is a challenge.  This area is known as the Lenca Corridor, named after the indigenous group that inhabits its rugged mountains, primarily in the departments of La Paz, Intibucá and Lempira.  The Lenca are an indigenous minority and have an estimated population of 100,000 people in Honduras. During the Spanish conquest, the Lenca resisted colonization and fought a decade-long war until their leader was assassinated.  This warrior’s name would become the currency of present-day Honduras, the Lempira.  In spite of Lempira’s heroic legacy, the Lenca remain marginalized in a predominately mestizo country.  It is no coincidence that the poorest departments of Honduras are located in the Lenca Corridor.

Maria Sabina & baby boy

Adelante currently serves the Lenca Corridor with microcredit through its branch office in La Esperanza, Intibucá.  Many of its clients are Lencan women whose struggles to improve their quality of life are illustrative of the region.  Maria Sabina has been a client with Adelante for the past two years, and is currently paying back a loan for L 6300 or $332.  Akin to many Lencan households, Sabina’s family relies on agriculture for subsistence and also to earn cash.  Owing to the cool climate, they not only cultivate corn and beans, but also potatoes and other vegetables too.  Sabina travels over an hour by bus to the market in La Esperanza in order to sell their surplus.  When the family’s plot of land is not producing, Sabina also bakes and sells bread to supplement her family’s income.  During the rainy season, roads deteriorate and often the bus can not reach Sabina’s distant community, so she has to walk several kilometers until she can catch the bus.  The rural villages that dot the slopes of the Lenca Corridor commonly lack basic infrastructure, such as roads, electricity and running water. Sabina’s community is no exception.

Sabina and her husband have six children, ranging in ages from a 1 year old baby to a 17 year old son. Of her six children, three attend a local primary school, but her two teenagers must help out to support the household. On most occasions, Sabina’s 13 year old daughter accompanies her to the market in La Esperanza.  Affording a secondary school education for their children is a challenge for most Lencan families.  Sabina’s small business ventures have lifted the family out of extreme poverty, but she will not be sending her daughter to secondary school this year. Sabina hopes that as her business grows in the future, she will have the income to offer her children a better education.

As part of an effort to alleviate extreme poverty in the Lenca Corridor, Adelante has included topics on agriculture in our series of Product Innovation Workshops in 2012.  Clients like Sabina learn how to improve production and increase profits from agricultural activities.  Other workshops on crafts and food preparation also allow Lencan women to diversify their businesses in order to enhance household income.

Rosario & daughter at flower-making workshop

Maria Rosario, a long-time client who also sells vegetables in La Esperanza, attended a flower-making workshop in February.  Rosario brought along her 12-year old daughter to the event, commenting, ¨It’s good that she came because she can make these products too, it’s important since she will soon be finishing primary school and if she wants to keep studying she will have to work hard!¨  Like Sabina, Rosario has achieved a better standard of living for her family, but a secondary school education for her daughter remains out of reach.  Fortunately, with the skills they have learned at the workshop, mother and daughter will be able to develop a new stream of income.

The poverty that pervades daily life for so many women and their families in the Lenca Corridor is one of the reasons why Adelante is keen to expand its operations in the region.  Already 1,000 women and their families are climbing out of extreme poverty as a result of our microfinance-education program.  We are excited to be expanding further with generous contributions from Women’s Empowerment International and the Rotary Foundation. Stay tuned to this blog to read more about how Adelante’s unique approach to microfinance is changing lives in the Lenca Corridor and across Honduras!

Meet a Resilient Micro Entrepreneur

Gregoria holding Yuca to make nuegados

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Gregoria is a dedicated micro entrepreneur in the department of Choluteca. Gregoria produces and sells ¨golosinas¨ or popular snack foods, such as chicharron (pork rinds) and nuegados (fried yuca dumplings). Since receiving her first loan from Adelante over four years ago for L 2500 or $132, Gregoria has diversified her business to sell a greater variety of snacks and has invested in raising animals, especially pigs and chickens.  Currently, Gregoria is paying off a loan for L 6 000 or $316, and plans to continue growing her business with Adelante, commenting, ¨It’s a big help, with every loan I am able to increase profits, which allows me to support my household.¨

Gregoria's kitchen

Gregoria is a single mother and has six children, but three of her children are already independent and live apart in the same community.  Gregoria is still responsible for her two youngest, ages 12 and 18 years old, but also has a son who shares a small house on her property with his wife and three young children.  Thanks to the increased income earned from her micro enterprise, Gregoria’s 18 year old recently graduated from secondary school, and she intends to send her youngest next year.  Gregoria has also made several improvements to her home over the years, but there are still renovations that need to be undertaken.  She hopes to secure a Home Improvement Loan from Adelante in order to replace the roof and redo the kitchen.  In addition to enhancing her family’s overall quality of life, Gregoria’s micro business enabled her to overcome great adversity when her property was flooded by the torrential rains that caused a state of emergency in Choluteca last October.

Gregoria and members of her assembly group live in a community that borders a lagoon near the Pacific Ocean.  Last October, several days of torrential rains caused the lagoon to overflow, flooding the entire community.  Adelante reported on the impacts of the relentless rains in Choluteca, noting that clients like Gregoria would be given extra time to make payments on their microloans.  Remarkably, the women in Gregoria’s assembly group returned to their businesses as soon as the flood waters receded, requiring only a 15 day extension to get back on track with their loan payments.  Gregoria accredits her ability to recover from the flooding disaster to the success of her small business, which allowed her to accumulate savings and afforded her income to rebuild and clean up.

An asset to Gregoria: a pregnant pig; notice the lagoon in the background

Gregoria’s property flooded with over 4 feet of water from the lagoon, and her kitchen, which also serves as her snack preparation space, collapsed.  She was fortunate to get her animals to a safe, dry location, but she and her family had to sleep in a shelter for two weeks.  Each day they would return to check on their animals and belongings in order to prevent further damages.  Gregoria’s daughter-in-law, who is also a client with Adelante and lives on the same land, explains, ¨Every year there is a little bit of flooding, but this year it was like nothing I had ever seen before… it’s especially dangerous for the animals because of the spreading of disease.¨ Maria Doris, another member of Gregoria’s assembly group, was not as lucky; she lost 41 chickens and 21 chicks to disease.  Another client, an elderly woman named Marcos, opted to stay at her home rather than move to a shelter. She recounts, ¨I had to go out to the highway, waste deep in water, in order to collect food and medical supplies from relief efforts.

Amazingly, these resilient women in Choluteca bounced back from the damages they incurred and did not get behind on their loan payments.  Gregoria, like many others in her assembly group, is thankful for her small business, which has provided her a stable source of income and thus the ability to recover so swiftly from the worst floods to have hit Honduras since Hurricane Mitch in 1998.

Business Education in Olanchito

Olanchito Clock Tower, the siren sounds three times daily

At bi-monthly assembly meetings, Adelante clients receive the support they need to succeed in their micro businesses.  A fundamental part of Adelante’s microfinance model is providing borrowers with small business education.  Since Adelante works primarily in rural areas, it is not surprising that many clients have never completed primary school.  Business education ensures borrowers have the knowledge to grow their ventures into profitable micro enterprises, which improves their overall standard of living.

On a recent field trip, I joined a Credit Officer to visit assemblies in and around the town of Olanchito, which is a two hour bus ride east of La Ceiba, Atlantida, in the department of Yoro.  Adelante has been offering the women of Olanchito microcredit since 2004 after opening the Tocoa branch office. Olanchito is part of the Aguan Valley, a region where bananas and African palms thrive.  The Standard Fruit Company (Dole) has a long history of operations in the area, and some communities are dependent on its banana plantations for employment.  Until discovering Adelante, many clients I met in Olanchito had never been given an opportunity to take out a small business loan before.

¨In what would you invest, if you were to have more money?¨

The assemblies I attended in Olanchito received an educational lesson called Administration 2, which is a sequel to a previous topic dealing with the basics of business management.  The Credit Officer started the lesson with five brain storming questions, such as ¨Do you know how much your product costs?¨ and ¨What difficulties do you confront managing your business?¨  After group discussion, several laminated posters followed illustrating the themes that commonly emerge in response to each question.

One theme that resonated strongly with Adelante’s micro entrepreneurs was how to provide credit to customers.  In Honduras, it is common for small businesses to offer products on credit since the population is very poor.  However, the Credit Officer stressed that customers should pay up front at least the cost incurred to the seller.  If the customer fails to pay back the balance on the product, micro entrepreneurs lose their profit, but not their investment.  After the lesson was delivered to a new assembly group, a first-time borrower named Irma confirmed, ¨I learned how to manage my business better, like what the Credit Officer said about taking into account the cost of the product before you sell it on credit. I think before I gave too much credit and I lost money that way.  I hope to learn more from future lessons¨.  Irma invested her first loan for L 3850 or $203 in a cosmetics business, which is a common venture for first-time borrowers but also one that often depends on providing credit to customers.

Long-time Adelante client, Juana

Small business education is not only valuable to women like Irma who have little experience, but also long-standing clients appreciate the lessons too.  Juana took out her first loan from Adelante for L 1000 or $53 over seven years ago in order to invest in a used clothing business. She has since expanded her micro business and now sells a variety of products, such as new clothes, shoes, jewelry, cosmetics and more.  Currently, she is expecting her first Individual Loan for L 20,000 or $1053, and she is an enthusiastic proponent of small business education.  Before the Credit Officer began the presentation, Juana announced, ¨I ask that everyone who is part of this assembly pay attention because these lessons help us so much with our businesses. Just think, banks don’t give free lessons so we should appreciate the education Adelante gives us to make our businesses more profitable.¨ The women in attendance responded in agreement, and once the lesson started, lively discussion could not be abated.

The last question of the educational lesson, Administration 2, affirms why Adelante has a client retention rate of 95%.  The question reads, ¨What do you need to obtain a larger loan and invest more money in your business?¨  An Adelante borrower must make on-time payments, attend assembly meetings regularly, and show that they have invested in their small business in order to obtain a larger loan.  These are the only requirements Adelante borrowers must fulfill.

Our Biggest Loan!

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Isabel is the recipient of the largest loan ever granted by Adelante to an individual.  Isabel and her husband, Juan, own a merchandise store in a rural community.  At first, they primarily sold medicines, but over the years the couple added clothes, cosmetics, accessories, dishware and other merchandise to the store’s inventory.  Isabel took out her first loan for just L 3000 or $158 over five years ago, and in 2008, was awarded her first Individual Loan for L10,000 or $526.  Since becoming eligible for Individual Loans, Isabel and Juan have invested in more expensive items, such as television sets and stereo equipment, which they sell on credit.  In 2010, the enterprising couple received the biggest Individual Loan ever disbursed by Adelante, L 45,000  or $2368, and last year they surprised the team again by requesting a loan for L 150,000 or $7895!

The store has an inventory valued at over L 500,000 or $25,000, an incredible accomplishment that would not have been possible without microfinance. Juan asserts, ¨Adelante is a big help¨, but the success of their micro enterprise is thanks to their own hard-work and diligence reinvesting profits.  The income gained from their small business has allowed the entire family to enjoy a much improved quality of life.  Up until five years ago, the couple and their four children, now 16 to 20 years old, lived in a cramped space adjacent to their store.  Over the course of their loan cycles with Adelante, a new home has been built with several rooms, an equipped kitchen and a patio.  Their success over the last few years has ensured that each of their children have completed secondary school.  Most inspiring is that Isabel is not satisfied, she divulges, ¨I have another goal, to open another store¨.

Isabel & Juan's store

This past December, Isabel and Juan were awarded a considerable loan from Adelante for L 100,000 or $5623, which they used to purchase inventory for the holiday season. Isabel hoped that with the profits accrued over the holidays, they would be able to construct another storefront in 2012, which would sell exclusively footwear.  She believes this business venture would be very profitable since the community is over three hours by bus from the nearest commercial center.  The importance of reinvesting profits is not underestimated by Isabel, she explains ¨I wouldn’t want to invest a loan in order to build the store because I wouldn’t earn profits to repay the loan, it’s better to invest first in our existing business and then use the profits to build the store¨.

In addition to opening another store, the couple plans to dedicate funds to ensuring their twin 16 year old sons receive the education they need.  While both have attained a basic secondary school certificate, the twins are not keen on academics, but would rather study a trade.  Currently, they are paying for their 18 year old son’s diploma in agriculture at a public institute, which costs around $316 a month in rent, food, transportation and school supplies.  While this exemplifies the higher standard of living the family has achieved, this considerable expense has prevented spending on other investments.  Fortunately, their son will soon earn his diploma and their 20 year old daughter already finished her studies and now lives with her husband and their six month old baby in a nearby community.  With only the twins to support, income can be directed towards their education, among other investments, such as leasing a vehicle.  Juan travels by public transportation to San Pedro Sula, and even as far as Guatemala to purchase inventory for the store, so a vehicle would make this task more efficient.

The success story of Isabel and Juan’s merchandise store is evidence that microfinance provides an opportunity for the poor to climb out of poverty.  Without the microloans they infused in their small business, this family would have never achieved the quality of life that they enjoy today.

Crafting Flowers in Intibuca

Last November, we reported on the Product Innovation Workshops that were taking place in Intibucá to benefit Adelante clients from the Lenca Corridor.  We are proud to announce that our first of eight workshops planned for 2012 was held last week, February 22-24.  We would like to take this opportunity to thank Women’s Empowerment International for generously funding our 2012 workshops.

Adelante client, Mercedes, showing off a flower she made

The workshop focused on creating decorative products that have a high profit margin and substantial demand. The first day was spent teaching the women how to make crepe paper flowers.  They learned how to craft different varieties of flowers, and once the women have these basic skills they can decide the details, for example the size, complexity and colors. It was amazing to witness how much care the women took to create their first flower since the process was very new to most of them.  As the day progressed, their flower crafting abilities improved considerably and our clients were pumping out beautiful flowers faster and faster.

Wreathes are popular for Day of the Dead celebrations

The second and third days were spent using the flowers to make bouquets, wreathes, and stalks, as well as bridal bouquets and veils using natural flowers.  With the skills acquired, the women can create their own custom products tailored for different occasions, such as a girl’s 15^th Birthday Party or Quinciñera, weddings, graduations, funerals, baptisms, and other events. One of the main benefits of crepe paper flower decorations is that the product is reusable, which makes them a preferred alternative to natural flowers.

In addition to using the crepe paper flowers to make popular products, the women also were taught how to take cheap retail items, such as hair accessories, and increase their value for resale.  Just by adding simple, inexpensive craft items, such as glue-on butterflies, colorful ribbon, or hand made pompoms, the accessories increase in value with not a lot of effort or cost.

Karla focused on finishing a festive flower stalk

Feedback from clients indicates that they are excited to be learning new skills and intend to put them into practice.  An elderly client, Mercedes, affirms, ¨Here I am learning something new, now I can sell this product, and I know this sells a lot!¨ Another client, Karla, is one of few who had past experience, but she explains how the workshop has been practical anyways, ¨In school I did these flowers before, but now I remember how to make them and I also think that the techniques being taught are better than the ones I learned before.¨ Karla supports herself through her micro enterprise selling home-made bread, but she plans to use the knowledge acquired to begin selling crepe paper flowers too.  She is currently studying at night to attain a secondary school diploma, so having an additional source of income will assist her with school related expenses.

As 2012 progresses, check back here on our blog to read about future Adelante workshops and how they are helping the women of Intibucá and La Paz to earn more income and further improve their overall quality of life!