Meet an AA Client from Choluteca

Scroll down to the third paragraph if continued from our August 2012 E-Newsletter

Home Improvement Loan at work

Lucila is a hard-working elderly woman who has been a client with Adelante for a year and a half.  Lucila lives alone in a humble home built nearly twenty years ago in a rural village outside of Orocuina, which is located in the southern department of Choluteca.  Several months ago, the wall of Lucila’s bedroom collapsed after a very severe rainy season that wreaked havoc in Choluteca last year.  Akin to the reality faced by much of the rural poor, Lucila did not have the income or the savings to repair the damage immediately.  Thankfully, Lucila quickly became an AA client with Adelante, which made her eligible for a Home Improvement Loan.  AA clients must have at least three loan cycles, make their loan payments on time, and attend assembly meetings consistently.  In March, Lucila was awarded a loan of L. 5,000 or $263 to build a new wall for her bedroom.  Since the rural poor often struggle to enhance their housing over several years, this new loan product is in high demand by our clients.

Not only is Lucila grateful for Adelante’s Loan Program, but she is also an enthusiastic supporter of the Business Education Program.  At assembly meetings held every two weeks, clients receive educational presentations from their Credit Officers.  Even though Lucila has worked as a micro-entrepreneur for nearly her entire life, she still appreciates the business development themes, she explains:

Lucila, Adelante client

¨The educational lessons help us with our businesses, for example they explain how to manage and promote our businesses better so that we can earn more profits.¨

Before withdrawing her first microloan from Adelante for just L. 1,500 or $79, Lucila always worked as a small business entrepreneur, investing in different income-generating activities.  Currently, Lucila produces and sells snack foods and fresh fruit juices out of her home and door-to-door in her community.  In the past, Lucila worked with other lending institutions to support her small business endeavors.  Now Lucila no longer obtains loans from other sources, and she proudly confirms that she is a client exclusively with Adelante.  Lucila affirms, ¨With Adelante, there are not a lot of requirements to take out a loan, and it’s very easy, not complicated like with some of the other institutions I have worked with in the past.¨ In the future, Lucila plans to maintain her AA status in hopes of obtaining another Home Improvement Loan so she can keep upgrading her modest home.

Lucila’s Rural Community

Since each of her seven children are grown and live apart, Lucila is not responsible economically for anyone else but herself, though she does take pleasure in spending time with her family.  One of Lucila’s daughters lives in the same community, so she often keeps her mother company at the house.  Lucila’s children who live further away often go to her house to spend the night, and she enjoys visits with her grandchildren, nine in total.  Lucila is very fortunate to have a tight-knit family, but her children also suffer from poverty so having a micro business enables her to be independent in her old age.  Recently, Lucila received her fourth group loan from Adelante for 4,000 or $211, which she used to invest in producing more delicious homemade food and drink.  Lucila expects to keep boosting her profits over future loan cycles in order to continue improving her standard of living.

Adelante Arrives in Danli, El Paraiso

Osiris, Adelante client

In the mountainous department of El Paraíso in eastern Honduras, Osiris operates a small used clothing store at the front of her house.  Only 18 years old, Osiris is grateful that her older brother gave her the initial capital to start a small business.  Recently, Osiris was able to secure a loan from Adelante for L. 4,000 or $211 in order to boost the inventory of her store.  She explains, ¨At first I had just a little bit of inventory, but now with the loan I received I have a lot more.¨  Over the course of future loan cycles with Adelante, Osiris hopes to establish another location at her uncle’s home, a half an hour walk away.  There are few local employment opportunities for young women like Osiris, so having a small business is an important income generating activity.

In 2012, Adelante expanded geographically to offer its microfinance program in the municipality of Danlí, which is in the department of El Paraíso.   The area is famous for its cigar production and also its corn cultivation.  In the rural villages that dot the landscape around Danlí, it is common for families to dedicate some of their land, no matter how small, to corn crops.  So important is the cultivation of corn that every year in the month of August, Danlí celebrates el Festival de Maíz or the Corn Festival.  During this festival, the town celebrates its corn harvest by enjoying live music, dance groups, rodeos, and delicious corn based food and drink.

Rural setting in Danli, El Paraiso

One of the longest standing members of the Adelante team, Jairo Irías, is currently developing operations in Danlí.  Jairo has been with Adelante for six years and left his post as the Agency Supervisor at the Tocoa branch office in order to initiate operations.  At the outset of 2012, Adelante destined L. 500,000 or $25,000 for loan pool in Danlí.  In May, Jairo disbursed his first loans to two solidarity groups totaling eight women.  At the end of June, loan pool reached L. 135,544 or $7,134 disbursed among 44 clients organized in 11 solidarity groups.

Even though Jairo has successfully established operations in the area, this feat is not without its challenges.  On a recent trip to Danlí, I joined Jairo in the field to learn about the process of developing a new zone of operations.  In a community located 30 minutes outside the center of town, I met three women from a solidarity group who received their first loan only a few weeks ago.  Adelante’s lending methodology dictates that prospective clients form solidarity groups and then come together to form an assembly, which consists of two to eight solidarity groups.  In this particular case, the assembly is made up of just one solidarity group since Jairo is building Adelante’s reputation.  The hope is that once villagers see how these women are benefiting from their microloans, more women will be inspired to take the risk and invest in a small business venture.

Women learn how to keep track of their payments

At the beginning and end of every assembly meeting,  women chant Adelante’s slogan: ¨Unity, discipline, hard work and courage. This is our way of life¨.  Since this was the group’s second assembly meeting, the women did not know the words very well, so I helped Jairo teach them the slogan again.  During the meeting, the women received an educational lesson about Adelante’s loan program.  Jairo patiently explained to the group how to use their libreta de control de pagos, which is a system that allows the women to keep track of their loan payments.  Near the end of the meeting, Jairo asked if the women had succeeded in finding others who would be interested in joining their assembly.  The women commented that some people are fearful of taking on debt, in part because of the country’s economic crisis and also because villagers have had negative experiences with other lending institutions in the past.   Jairo is confident that the success of this solidarity group will attract other women to Adelante, and he expects to add two more solidarity groups to the assembly by the end of the first loan cycle.

In the coming months, Jairo will continue to work diligently to grow loan pool in Danlí in order to meet the 2012 disbursement goal of $25,000.  In 2013 and 2014, Adelante plans to contract additional Credit Officers to expand operations in the region and eventually establish a sixth branch office.  There is an immense need to address the extreme poverty being experienced in by so many people in Honduras.  Adelante’s recent geographic expansion will help more rural families achieve an improved standard of living.  .

Agriculture Workshops in Intibuca

Agriculture workshop, Intibuca

Parts of this story appear in our July 2012 E-Newsletter

In the Western region of Honduras known as the Lenca Corridor, extreme poverty is widespread.  As part of Adelante’s Education Program, women from this area are being offered the opportunity to participate in Product Innovation Workshops  thanks to funding from Women’s Empowerment International. The goal is to provide women with practical knowledge that enables them to develop new sources of income and/or make their small businesses more competitive.  Topics range from crafts to food preparation, but one of the most critical themes among the women of Western Honduras is agricultural production.

The cool climate in the Western highlands allows for the cultivation of a great variety of crops, such as berries, fruit trees, grains, and vegetables.   Even still, producers often lack knowledge on how to maximize the productivity of their land.  Part of the problem is the lack of training opportunities for local producers in the area.  By offering workshops on agriculture, Adelante is trying to bridge this gap and help clients who are already involved in agriculture to improve their production.

So far in 2012, Adelante has hosted two agriculture workshops.  The first workshop was held in April and focused on soil conversation.  Women learned about the importance of using organic methods to preserve soil fertility for future generations. Recently, I had the opportunity to attend the second workshop which dealt with cultivation methods for local crops.  The women spent the first day in the classroom where they were taught about how to cultivate different plant species and control pests and disease.  The following day, the women visited a farming cooperative where they could learn from producers and analyze their methods.  This learning methodology is called ¨campesino a campesino¨ or farmer to farmer.  Danilo Mejía, the agricultural engineer responsible for leading the workshop, asked the women to discuss the positive and negative aspects of the cooperative’s farming activities. The most significant criticism to emerge from the ¨campesino a campesino¨ exercise was the overuse of chemicals in the cooperative’s fields.  Danilo affirmed that organic substitutes could provide the same benefits to production that chemicals do, while preserving the soil’s fertility for future generations.

Treatment for diseased plants

The final and most popular part of the workshop was practicing how to make organic products so as to diminish the use of chemicals and improve production.  Women learned how to make three different organic products: fertilizer, a treatment for diseased plants and another for fungus growth.

Treatment for fungus

The women found this knowledge extremely practical since the products were very simple and inexpensive, also making them a viable option for a business venture.  For example, the organic fertilizer was composed of cow manure, unpurified water, fresh milk, molasses, and hydrogen peroxide, and the cost of producing 15 liters of fertilizer was only L. 70 or $3.50.

Organic fertilizer

Feedback from clients indicates that the knowledge acquired was very useful and the women intend to put their new skills into practice. Victoria is a long-standing client who normally uses her microloans to invest in her of business preparing and selling food from her home.  However, she and her family also cultivate coffee, and are interested in growing vegetables too. Victoria especially enjoyed learning about the different natural products she could use to boost her coffee crop, she confirms, ¨We have 250 coffee trees we are ready to plant, and we are going to make this fertilizer instead of buying chemical-based products as we normally would.¨

The idea of substituting chemical products with organic ones resonated with another client, Paula, she comments, ¨We use far too many chemicals on the land, we don’t take care of it very well.¨  Paula is currently paying off her second Individual Loan for L. 16,000 or $842.  Over her many loan cycles with Adelante, Paula has developed a small convenience store and has used the profits to invest in growing more crops.  Today, Paula and her family cultivate potatoes, vegetables, corn and beans, and she plans to use the new farming methods she has learned to further improve her land’s productivity.

Paula recieves diploma from Adelante Education staff member

Having attended this most recent workshop, I know that the topic of agriculture is needed and wanted by Adelante’s clientele in the Lenca Corridor.   Not only will these women enjoy an improved quality of life due to better farming practices, but they also will contribute to the environmental sustainability of their local communities. We would like to thank Women’s Empowerment International for its continued support of Adelante’s operations in Intibucá.  At Adelante we can always use donations from our generous supporters to bolster the activities of our Education Department.  Please consider making a donation and help thousands of women become successful micro entrepreneurs!

Individual Loans in Tutule, La Paz

The Intibucá branch office located in the highland town of La Esperanza has been offering mircocredit to the women of La Paz, a neighboring department, since 2008.  The Adelante Credit Officer responsible for loan pool in the area, Rosa Mejía, is based out of Marcala, La Paz, traveling to the branch office weekly.  Marcala is renowned for its coffee trade, with many families dedicated to producing the highly demanded bean. Coffee aside, the department is one of the poorest in Honduras.  Surprisingly many coffee producing families, whether independent or part of cooperative, still live in extreme poverty.

Catholic Church in Tutule

On a recent visit to Marcala, the distances Credit Officers travel to follow-up with their clients and attend bi-monthly assembly meetings became very apparent with a trip to San Pedro de Tutule.  This town is located about an hour’s drive from Marcala.  Adelante Credit Officer, Rosa, spent her younger years living in Tutule, so the commute is worthwhile since she has family and friends in town.  In the center of town, there is an attractive central park and an interesting Catholic church, while the surrounding hilly landscape is doted with the pine and plantain trees.  Plantains are an important staple of the Central America diet, especially crucial to poor families since the starchy fruit is inexpensive and very filling.  Rosa tells me that many families grow plantains to sell in nearby El Salvador.

Cecilia & daughter at restaurant

In Tutule, Cecilia has a comedor or small restaurant located in the center of town.  Cecilia has been a client with Adelante since 2009 when she received her first loan just L. 4,000 or $211.  Since becoming a client, Cecilia has seen her business grow tremendously and recently, she took out an Individual Loan for L. 15,000 or $789.  With this loan, Cecilia invested in a microwave, and she hopes that in the future, she can obtain another Individual Loan in order to start a small convenience store.   A single mother, Cecilia uses the income she earns from her restaurant to support her 3 year old daughter.  As a micro-entrepreneur, Cecilia feels confident that her daughter will enjoy an improved quality of life.

Adelante’s Individual Loan program rewards AA clients like Cecilia with the opportunity to secure larger loans, anywhere from $600 to $5,000.  Women who consistently attend assembly meetings, invest diligently in their small businesses, and have an excellent repayment record are considered AA clients.  Loan amounts are large enough that it would not be fair to the solidarity group to vouch for such a big loan.  Even still, recipients of individual loans must solicit a small group loan in order to maintain their standing in the solidarity group.  Loans over $2,000 are collateralized like a traditional loan, but in Cecilia’s case, her collateral is based on trust given her proven dedication to her micro enterprise.

Norma at the workshop

Another client I met in Tutule, Norma, is the recipient of Adelante’s largest Individual Loan in the Marcala area.  Norma has been a client for two years and she and her husband run a mechanical workshop out in front of their home.  After successfully paying back her first Individual Loan for L. 20,000 or $1,053, Norma solicited a loan for L. 50,000 or $2,632.  Given the convenient location of her workshop and the lack of gas stations in the area, Norma’s business venture necessitates major purchases of equipment, gasoline, lubricants and other items for vehicle maintenance.  Thanks to her micro business, Norma has succeeded in providing an education for each of her five children, ages 6 to 25.  Currently, she has two teenagers studying in secondary school and a third who just entered university in Comayagua.  The examples of Cecilia and Norma illustrate why it is important to reach out to distant communities like Tutule.  The need for microfinance is immense in rural Honduras and there are so many women eager to improve their standard of living through the hard work and discipline it takes to become a successful small business entrepreneur.

Honduran Emigration

Bety and niece pose at an assembly meeting in Cortes

Parts of this blog appear in our June 2012 newsletter.

Seven years ago, Bety’s husband left her and their newborn son behind in Honduras in order to immigrate illegally to the United States.  Her husband was successful and regularly sends back money to his family.  Bety is one of many Adelante clients who have family members working abroad, primarily in the United States.  Even though Bety has not seen her husband since he left Honduras, the extra income helps ensure a brighter future for their son, now seven years old.

Each year, thousands of Hondurans risk their lives immigrating to the United States.  They are fleeing a country plagued by extreme poverty, inequality, unemployment, and insecurity.  In Honduras, 67% of the population lives below the poverty line(1), and nearly a quarter survive on less than $1.25 (PPP) a day(2).  Facing a worsening national economy, with staggering levels of underemployment, Hondurans have few options available domestically to improve their lives. Given these facts, it is understandable why so many Hondurans perceive working in the United States as the only solution to their poverty.

Mourning the loss of a loved one who died at the Tamaulipas massacre

Most emigrating Hondurans face an arduous journey and are at risk of being intercepted by drug traffickers, kidnappers, thieves and gangs.  Hundreds of migrants have been kidnapped to further enrich criminal networks, often involved in drug crimes, in Mexico and Central America(3).  Many of such kidnappings have violent ends; let us not forget the Tamaulipas massacre in Mexico where 72 migrants were found murdered execution style, 30 of which were Hondurans. Despite the evident risk, it is reported that each day 500 Hondurans leave their country behind in search of a better future(4).  Even if they evade the most dangerous threats during their expedition and arrive safely to their destination, thousands of Honduran migrants are deported every year.  Last year alone, 22,367 Hondurans were deported from the United States(5), and between January and May of this year, already 11,500 have been deported(6).

An Adelante client from Colon, Adelaida, has a story that illustrates why so many Hondurans take the chance.  Adelaida worked just five years in the United States. By working abroad, Adelaida achieved her goal to buy a small piece of land and construct a modest house in her village in Honduras.  Now that she owns a home, Adelaida is satisfied with her earnings as a small business entrepreneur.  She is currently paying off a loan for L 7,000 or $368, and hopes to keep growing her business in order to sustain her standard of living as she grows older.  Income earned abroad plays an important role in driving the Honduran economy.  In 2011, Remittances to Honduras were estimated at over $2.7 billion(7).

Adelante client, Mirtila

Since Adelante targets poor, rural women, narratives of emigration, remittances, and long distance marriages are not uncommon.  An Adelante client from Choluteca, Mirtila, has another familiar story.  Twelve years ago, Mirtila’s husband embarked on his trip to the United States, leaving behind Mirtila to care for their three young children.  Mirtilia’s husband never sent money back to his family and presumably has started a new life in the United States.  A young mother, Mirtila was left to raise her children with the help of her extended family.  Thankfully, Mirtila never intended to depend solely on remittances, she had already invested in a small business venture.

Mirtila is what Adelante calls an AA client, which means she has an excellent repayment record, invests in her small business diligently and attends assembly meetings consistently.  She is currently paying off L 25,000 or $1,316 in loans from Adelante, including a group loan, an individual loan and a home improvement loan. She explains, ¨What I like most about Adelante is that they offer their best clients excellent opportunities, for example, there are no other institutions that will give their clients three loans at the same time.¨  Microfinance has allowed Mirtila to seek out a livelihood in Honduras that ensures an income to support her family.

Even though Adelante has many clients who receive income from abroad, these hard-working entrepreneurs are not dependent on their remittances.  Bety, who is fortunate to have a husband who frequently sends money back, contends that her micro business has helped her to achieve an improved quality of life.  Before becoming a client, Bety worked on a banana plantation spraying chemicals.  Today, Bety has a micro enterprise selling merchandise outside of a textile factory, she asserts, ¨Now my work is better, I earn more with my small business and I do not have to work so hard.¨  Whether or not they receive the added boost of remittances, Adelante clients, like Bety, Adelaida, and Mirtila, are using the opportunity afforded by microloans in order to invest in small businesses and improve their overall standard of living.

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(1) Source: ECLAC, Social Panorama of Latin America 2011.

(2) Source: UNDP, Human Development Report 2011.

(3) Centro de Derrechos Humanos Miguel Austin Pro Juarez A.C. Cuaderno sobre Secuestro de Migrantes.  December 2011.

(4) Source: La Prensa Hn. ¨Cada dia se van 500 mojados a EE.UU.¨ www.laprensa.hn February 7 2010.

(5) Source: La Prensa Hn. ¨Baja cifra deportados de EUA.¨ www.laprensa.hn January 3 2012.

(6) Source: La Prensa Hn. ¨Ya suman 11,500 los deportados¨ www.laprensa.hn May 29 2012.

(7) Source: La Prensa Hn.  ¨Aumento de remesas ha side de $41 million¨  www.laprensa.hn. December 26 2011.

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

Continuation from E-Newsletter Starts at Third Paragraph

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

Continuation from E-Newsletter starts at 3rd paragraph

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.