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.

Building Confidence in Yorito

Welcome to Yorito

Nestled in the mountains two hours east of El Progreso, the scenic town of Yorito is emblematic of the rural communities the Adelante Foundation aims to serve with microcredit.  Heading to the center of town, clusters of houses are separated by corn fields and grazing cattle.  Rolling hills are topped with pine trees, a dominant feature of the landscape throughout the interior of Honduras.  Yorito, which is in the department of Yoro, is known as the ¨Cuna de Aguan¨, or the birthplace of the Aguan River. Originating in Yorito, the river flows east to the department of Colon, where it surges and finally meets the Caribbean.

Working the land is still a mainstay for many families in the department of Yoro.  Corn and beans are the traditional crops, but coffee is increasingly cultivated given that it fetches a higher price. Opportunities for employment outside of agriculture are limited, and many people migrate to San Pedro Sula, the bustling economic center of Honduras, or even to the United States.  On the dirt roads around Yorito, small adobe built homes sit next to large modern houses, a juxtaposition produced by remittance income.

In Yorito, I met Aura, a micro-entrepreneur and client with Adelante.  Like so many other rural graduates in Honduras, Aura completed secondary school only to find that she could not get a job in her town.

Adelante client, Aura

Aura explains, ¨I graduated from school and couldn’t get a job, so I took out a loan to start a business. I was nervous about being in debt, but I couldn’t do nothing, I had to work to support my household¨.

Aura invested her first loan for $105.00 in a micro-enterprise selling cosmetics, jewelry, under garments and other inexpensive items. Currently, she is paying off her third loan for $211.00.  Aura lives with her mother, also an Adelante client, and three of her seven siblings.  Aura helps her mother support the household, but she also has goals of her own, she affirms, ¨I would like to open my own store front so I do not have to sell door to door on credit, with a store people will come in with cash in hand.¨ In Honduras, vendors in rural areas often provide products and services to their customers on credit since many people can not afford to purchase in full.  Aura confirms that she is no longer nervous about taking on debt, and is more confident today than she was over a year ago when she withdrew her first microloan.

Lidia & daughter

Lidia is another Yorito resident who has experienced a boost of confidence after becoming a client with Adelante.  Five years ago, Lidia and her husband both had stable jobs, but the company they worked for collapsed, leaving them without a source of income.  Using what they had left of their savings, the couple opened a small convenience store.  Over the years that followed, the store barely grew since there was no source of investment.  Lidia’s family also grew over those years; in addition to their biological son, the couple adopted an infant girl and took in a niece too. Lidia received her first loan with Adelante for $184 in order to boost the product inventory of the family’s small business.  Having never received a loan before, Lidia confides that she was very nervous, especially since she felt her family was cursed with bad luck.  Now on her third loan for $516, Lidia is confident that this year, ¨we will be blessed with more success than ever before!¨

I am touched by the women I encountered in the small rural town of Yorito.  Taking out a loan is nerve-racking, so I am impressed by the courage Lidia and Aura possessed to take a risk and invest in a business venture.  These women want to work hard and improve their lives, but they were never given the chance until Adelante offered them non-collateralized loans.  In the process, they were able to overcome their fears and build the confidence they need to accomplish their goals.

Santos Albertina, Micro Entrepreneur

Santos & her daughter

Santos Albertina Alvarez is a dedicated store-owner and enthusiastic client of the Adelante Foundation.  Over the course of five loan cycles, Santos has established a prosperous micro business in the community of El Cowle, which is near the city of El Progreso, and located in the department of Yoro. Santos runs a pulperia (or convenience store) adjacent to her home, where she resides with her husband, daughter and two grandchildren.  Santos´ entrepreneurship affords her family with a sustainable source of income, an achievement made possible through microfinance.

Before obtaining a microloan from the Adelante Foundation, Santos sold popular meals, such as fried chicken, to members of her local community. Santos laments that she never earned sufficient income, so when she received her first loan of L 3 500 or $175.00 with the Adelante Foundation, she decided to invest in selling clothes instead. During the loan cycles that followed, Santos developed a pulperia, a business strategy that has proved to be more profitable. Microcredit enabled Santos to purchase both a refridge and freezer, permitting the sale of cold drinks and perishable goods. Santos expands her inventory with every loan cycle, and is currently paying back a loan for L 9 000 or $450.00.  When asked if Santos plans to take out more microloans in the future, she exclaims, ¨Until the Adelante Foundation tells me no or stops existing!¨

Santos´ micro business

Santos is married and has three adult children, one of whom is a client of the Adelante Foundation and part of the same assembly group. Santos’ daughter has two young children, and sells plastic products door to door in her community.  Neither mother, nor daughter had ever withdrawn a loan before, commenting that interest rates were terrifyingly high.  Santos enjoys the presentations she receives at bi-monthly assembly meetings on small business education, confirming, ¨You learn more with every presentation, you learn how to make your business better, how to sell more¨.

The income generated from Santos´ micro enterprise maintains the household’s basic necessities, such as water, electricity and food, and simple luxuries, such as cable TV.  One major exception is the construction of a new bathroom, an impressive accomplishment.  The cost of building a bathroom, made from concrete, including a toilet bowl, shower head, and drainage system, is over L 8 000 or $400.00!  Thanks to Santos’ enterprising spirit, the family’s living conditions have been improved. Santos plans to save more to continue enhancing her family’s overall quality of life.

Orientation

Sitting at a desk in an office, receiving training sessions and reviewing informational materials are familiar activities for most job orientations.  On the contrary, starting out as an International Field Correspondent for the Adelante Foundation necessitates jumping into a role that does not have a training manual.   As an International Field Correspondent, I travel throughout Honduras to meet with clients of the Adelante Foundation, in hopes of bringing their stories to the organization’s generous supporters.

My goal is to report on the stories and other tales from the field, which I trust will make readers feel more connected to the mission of the Adelante Foundation, despite often being so far away.  I would also like to bring forth the issues that shape the livelihoods of the Honduran people.  In doing so, I too will learn a great deal more about this diverse country’s current struggles and past legacies.  In order to accomplish these goals, orientation includes getting to know all of Adelante’s five offices (La Ceiba, Tocoa, El Progreso, La Esperanza, Choluteca), and the eight departments or states (Atlantida, Islas de Bahia, Colon, Yoro, Cortes, Intibuca, La Paz, Choluteca) these branches serve.

The First Few Weeks

In only three weeks, I have already familiarized myself with three of the five branch offices (La Ceiba, El Progreso, and La Esperanza), and four of the eight departments (Atlantida, Yoro, Intibuca and La Paz).  At each office, the goal is to meet the team, learn about the area, and meet clients either individually at their homes or during assemblies (gatherings where clients receive business related education every two weeks).

La Ceiba

I jumped into my new position by visiting assemblies around La Ceiba. Although more urbanized, clients still work hard to provide their families with the basic necessities such as food, electricity, and water.  The women I met in La Ceiba told me of their investments in education for their children, a difficult goal to achieve without sustained income.

Cattle Jam, outside El Progresso

 

 

 

The following week I set out to El Progreso, a city whose growth has been spurred by nearby San Pedro Sula, the economic center of Honduras.  Visiting clients in the communities outside the city, I passed endless plantations of bananas and sugar cane.  Women spoke of their husbands who labor in these fields, receiving minimal wages for long days of arduous work.

Heading west along the north coast from La Ceiba to El Progreso, the landscapes of tropical vegetation, densely inhabited areas and cash crop plantations could not be more different from where I am currently, La Esperanza.

In the highland town of La Esperanza, pine tree topped mountains are evidence of a cooler climate and more rugged terrain.  Communities are often many kilometers apart from one another, and there are few paved roads.

 

 

First Impressions

After meeting a few clients, I realized that my orientation will be more than just a traveling schedule over the next two months.  Adelante’s clients are generally more than willing to share their opinions, discuss their loans and display their businesses.  Nonetheless, I quickly noticed that whipping out a pad of paper and a pen makes even the most extroverted woman nervous; no doubt a formal interview makes me anxious too!  Instead, casual chatting with a client or even a group is a better way of getting to know their stories.  The disadvantage of this strategy is that after leaving I am jotting down every last detail I can remember!

First impressions tells me that the mission of the Adelante Foundation, to improve the standard of living for extremely poor women in rural Honduras, is being met head on through microfinance and small business education.   Loans as little as $50.00 might seem insignificant by the standards of the developed world, but for the extreme poor, microloans make a difference.  Every assembly I visited and every client I met, revealed how their loans have been used in order to boost their businesses and improve their overall standard of living.   My hope over the coming weeks is to continue the process of orienting myself with the remaining offices and departments, where I expect to find the same outcomes of positive change.